As most of you are aware, I write the twice monthly Asian Tax Review for Tax Analysts. I had a simply wonderful piece for which the pdf copy I have permission to reproduce for other publications simply could not be reproduced for the Tax Analysts format. Thus, with a bit of 'tweaking', I change the following for the readership of Tax India International.....

Happiness is a Sunday morning, at home in Guangzhou. At that time, I have a morning of relaxed escapism, listening to Prairie Home Companion, the one national radio show remaining in the U.S. and reading the FT Weekend edition on my iPad. Six weeks ago, I read an end of January article in the weekend FT - a column by Simon Kuper in the Life and Arts section of that newspaper. Simon writes the 'top of page 2' article in this weekend pulp magazine which is 'frosting on the cake' to my FT internet subscription. I like the stuff he writes and am a regular reader. Occasionally, I email him, as I do with many of the writers who boldly (or idiotically - this is still open to conjecture) list an email address to respond to. Trust me when I say that writers are starved for any sort of sane comment - at least we know that someone has actually read what we've written (besides the editors, of course!).

Simon's 28 January article was about Chimurenga, a 'New Yorker-like' magazine emanating from and entirely about Africa. I am a New Yorker addict. It is the reason I purchased my iPad! Yet I am also sad to admit that my knowledge of Africa is limited in spite of living in Guangzhou, the city with the largest African population in China. There are good aspects of the rapidly expanding trade between the nations of Africa and China and India and there are some bad aspects, as well - including some valid charges of 'imperialist goals with exploitation in mind'. Sadly, I feel, both Indians and Chinese will probably prove to be no different than their American and British predecessors within the fields of business development (a far kinder terminology than imperialism!). Yet as trade develops, There'll also be development of a business legitimacy and transparency and hopefully, corruption will decline (or, at least, be contained). Trade does this sort of thing! And a field of specialists who will emerge, with the capability of explaining the developing tax systems of Africa not just to China and India but to the world. Are there any Indian universities who have started 'watching' this area? I don't know Indian academia as well as their Chinese counterpart. Why some Chinese university has not yet started an academic think tank to codify commerce and tax of Africa is beyond me....why the western universities are not looking into this is a big question, too. China - Africa trade must also be THE reason why Seychelles, my favorite offshore jurisdiction, an atoll nation 1,000 miles off of Africa with a total population of approximately 85,000 has a Chinese embassy with a staff of nearly 100. Yeah, I should be a bit more knowledgeable about commercial Africa as it develops.

I Googled and then went to the website: www.chimurenga.co.za, I then clicked on 'Chronic Newsroom' from the home page and saw, at the bottom of that page, listed under Public Service Announcement, 'The Guilt Tax Guidelines for Individual Taxpayers'. Guilt Tax??? Take a look at this page. It is printed with permission of Ntome Edjabe, Editor and Karen Press, the writer who conceived as interesting a concept from what was actually some wonderful tax satire. I think that this is an idea whose time has come for possible consideration - especially in light of the truly lacklustre, unimaginative budget just presented in India!

There is no 'Guilt Tax' but perhaps some sort of wealth tax or excise tax in India, based upon, say, those 10,000 square feet villa owners, exclusive club memberships, yachts and planes and super expensive cars? Who knows....while President Obama might have his difficulties in getting a tax on high income earners through the U.S. Congress, perhaps not the national government but some of the states might be interested in tackling the ever widening income gap through an excise or wealth (or guilt) tax. One state might have an easier time 'surcharging' those who can presumably most afford to pay for it. And for developing nations around the world, some sort of wealth tax based upon the 'Guilt Tax' concept might just be the thing!

P.S. I liked what I saw, sufficiently, from the site that I purchased the most recent issue of Chimurenga.

O.K., now back to my every day sort of reality, living in Guangzhou, PRC - We have just seen the end to the annual convocation in Beijing of both the National People's Congress and the Chinese People's Political and Consultative Congress and that means that various and sundry tax proposals are run up the proverbial flag pole to see if anyone 'salutes' any new proposal. If there are a sufficient number of salutees, then appropriate attention to that idea will be given.

What's new is the awakening awareness that a property tax system must be developed in China because the cities are running out of money. What's new is that the central government, in setting up a mandatory social security system, is going to have to start expansion of a new national tax bureaucracy. What's new is that the concept of an inheritance tax is being floated to see what sort of opposition there will be (and hence, difficulty in adopting it).

Shenzhen, across the border from Hong Kong, was a town of 325,000 when I first visited it. I lived there for a while. I hated it. Shenzhen is now a 15,000,000 city with far more quality of life than the locals of Hong Kong have. Shenzhen has a financial problem because it sold long term leases of its land to support its growth. The city's now got a problem because there is no more land to lease. How's it going to be self-sustaining?

Chongqing and Shanghai have a very 'entry-level' form of property tax. This is not what is called for in the country, as the purpose of the tax must not only be to support the government allowed to impose this tax but act as an 'equalizer', a deterrence against real estate speculators and property bubble makers by justifiably taxing land based upon value, regardless of whether it is developed, being developed or 'being held' for future development. Of course, in order to do this, you need property rolls. And once you have these lists, you need to correlate market values and that means honest, transparent appraisals.........is something like this possible - in China.....or in India????? Anyhow, the central government is going to have to step in at some point of time to adapt a national standard - not that there'll ever be uniformity throughout the country in any form of tax!

Yet, a city like Shenzhen, which needs this faster than anyone could possibly imagine, is going to have to set a standard for this that will be adopted by the country - I'd bet on this one.....

Set up and run a social security system in China? Sounds good? Actually, this one is a nightmare! To begin with, this program, originally intended to be uniformly introduced throughout the country this past October, has only started in Beijing in 2012 and recently introduced to Tianjin and Suzhou......three cities, thus far, in a country of 1.3 billion. Where to begin? First, you've got to be able to fund the bureaucracy and then put that bureaucracy in place to tax employees and employers for social security. Then you've got to 'police' the system to assure that it is enforced transparently. Then you've got to invest the taxes collected in safe, income producing investments and then you've got to fairly disburse the funds as they have been set up for. For any country of over 1 billion population, it ain't that simple! If you have a mobile population, how are you going to transfer personal information from city to city to city, as you are on the move? This one will need central government funding and participation far more than the central government is currently aware of!

Inheritance tax in China.....or India? There are estate and inheritance taxes in the west (but not in France). Why not consider this tax as a form of wealth gap equalizer? Wealth tax? France has one. Switzerland has one. Excise taxes on luxury purchases....why not tax even more??

And that 'guilt tax'? Perhaps this is an idea whose time has come!