Demand Propels Home Prices Upward 2 days ago CCAR Fed Federal Reserve Stress Test 2017-06-28 Joey Pizzolato Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Share Save Promising Outlook for Banks after Fed Stress Test Announcement The Federal Reserve announced the results of its Comprehensive Capital Analysis and Review, or Stress Test, on Wednesday. Thirty-four bank holding companies took part in the stress test, which is now in its 7th year. The Stress test operates in two parts: the quantitative, and the qualitative, according to an official statement by the Fed. “When considering a firm’s capital plan, the Federal Reserve considers both quantitative and qualitative factors. Quantitative factors include a firm’s projected capital ratios under a hypothetical scenario of severe economic and financial market stress. Qualitative factors include the strength of the firm’s capital planning process, which incorporate risk management, internal controls, and governance practices that support the process.”Out of the 34 banks, 13 were subject to both the quantitative and the qualitative portion of the test, while the remaining 21 were rated only on quantitative factors. Out of the total test group, the Fed did not object to a single banks’ capital plan. One bank, however—Capital One Financial Corporation—will be required to resubmit its capital plan by the end of 2017, although they were still given a pass. The Fed found that U.S. firms’ common equity capital ratio has more than double, rising to 12.5 percent at the end of Q1 2017 from 5.5 percent in Q1 2009, a total increase of $750 billion to $1.25 trillion. As a result, most major banks, including Wells Fargo, Bank of America, SunTrust Banks, JPMorgan, American Express, and Discover Financial Services are raising their dividends. CitiBank doubled its dividends. After hours trading barely slowed down once the market closed—Fifth Third Bancorp showed a 3.10 percent increase, while SunTrust boasted a 2.51 percent increase and Discover’s percent change was at 2.38 percent. Read below to find a complete list of the banks that participated in the stress test:Ally Financial, Inc.; American Express Company; BancWest Corporation; Bank of America Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; BBVA Compass Bancshares, Inc.; BMO Financial Corp.; Capital One Financial Corporation; CIT Group Inc.; Citigroup, Inc.; Citizens Financial Group; Comerica Incorporated; Deutsche Bank Trust Corporation; Discover Financial Services; Fifth Third Bancorp; Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; Huntington Bancshares, Inc.; JP Morgan Chase & Co.; Keycorp; M&T Bank Corporation; Morgan Stanley; MUFG Americas Holdings Corporation; Northern Trust Corp.; The PNC Financial Services Group, Inc.; Regions Financial Corporation; Santander Holdings USA, Inc.; State Street Corporation; SunTrust Banks, Inc.; TD Group US Holdings LLC; U.S. Bancorp; Wells Fargo & Company; and Zions Bancorporation. Tagged with: CCAR Fed Federal Reserve Stress Test Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email [email protected] The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago About Author: Joey Pizzolato Previous: The Psychology Behind Why People Buy, And Where Next: Mortgage Applications Down, Shares Mostly Unchanged Print This Post Servicers Navigate the Post-Pandemic World 2 days ago in Daily Dose, Featured, Government, Headlines, News June 28, 2017 1,506 Views Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles Sign up for DS News Daily The Week Ahead: Nearing the Forbearance Exit 2 days ago Home / Daily Dose / Promising Outlook for Banks after Fed Stress Test Announcement Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe
Ainsleys deal nearsAinsleys’ administrators are in “advanced” talks with some of the interested parties for all or part of the business. Joint administrator at Grant Thornton Joe McLean explained that he was in talks with 10 interested parties, and was looking at a variety of options for the business going forward. All 29 of the craft bakery chain’s shops are still trading.Borders woeFollowing the announcement that the Borders chain has gone into administration, a spokesperson for Starbucks has said until the situation becomes clear, “we’re unable to speculate on the future of the 36 Starbucks coffee houses located in Borders’ stores”.NAMB weekendThe National Association of Master Bakers hosted over 80 guests at its recent social/business weekend held at the Welcombe Menzies Spa and Golf Resort at Stratford-upon-Avon. It was the first mid-year catch-up for members for five years. During the weekend Mike Holling was voted in as chairman of the National Craft Bakers’ Week 2010, which takes place from 7-12 June.BB on your mobileYou can now access www.bakeryinfo.co.uk quickly and easily on your mobile thanks to a simpler interface for reading the latest news on handheld devices. We have optimised the website to iPhone, Blackberry and standard mobile browsers, with modifications made to the layout to make it more user friendly for smaller screens.Sustainable agendaAround 85% of manufacturers have either increased their investment in sustainability or kept it the same during the recession, according to new research from food and grocery experts IGD.
Fifth in an occasional series on how Harvard researchers are tackling the problematic issues of aging.A habitually healthy eater, Frank Hu stocks his refrigerator with fresh fruits and vegetables, fish, and chicken. His pantry holds brown rice, whole grains, and legumes, and his snack cabinet has nuts and seeds. He eats red meat only occasionally, rarely buys white bread, soda, bacon, or other processed meats. He’ll purchase chips and beer, but only now and then, mostly when entertaining friends.When it comes to eating smartly in ways that can help us keep fit and live longer, Hu knows best.“There is no single, fit-for-all diet for everyone,” said Frank Hu of the Harvard T.H. Chan School of Public Health. Kris Snibbe/Harvard Staff PhotographerHu took over the Department of Nutrition at the Harvard T.H. Chan School of Public Health in January. His eating habits are greatly informed by his research on what constitutes a healthy diet. While he knows they’re not for everyone, he says people can nonetheless move toward eating patterns that both appeal to them and help them stay well.“There is no single, fit-for-all diet for everyone,” said Hu, a professor of nutrition and epidemiology and a professor of medicine at Harvard Medical School. “People should adopt healthy dietary patterns according to their food and cultural preferences and health conditions. I don’t have a rigid regimen, but I always emphasize healthy components in all my meals.”And so, according to considerable research, can all those who want to reduce the risk of obesity, diabetes, cardiovascular diseases, and other chronic illnesses, and increase both longevity and quality of life in old age.We become what we eatTo some extent, when it comes to healthy aging, we become what we eat. According to the Centers for Disease Control and Prevention (CDC), one in four deaths results from heart disease, the leading cause of death in the United States. Among the top risk factors are obesity, high cholesterol, high blood pressure, and poor diet — with the first three often tied to the last. The rise in obesity has hit the United States hard. More than a third of adults and one-fifth of children and adolescents age 2 to 19 are obese.Research shows that sustained, thoughtful changes in diet can make the difference between health and illness, and sometimes between life and death. For more than 50 years, researchers who have studied the link between diet and health have extolled the virtues of the Mediterranean diet, with its emphasis on vegetables, fruits, legumes, nuts, whole grains, olive oil, and fish, and its de-emphasis on red meat and dairy.“The elements of a healthy diet were readily available in the Mediterranean, where people had to eat local fruits, vegetables, and fish.”— Walter WillettPioneering studies, such as one led by nutrition expert Ancel Keys in the late 1950s, helped establish the Mediterranean diet as the benchmark. Keys’ landmark Seven Countries Study, which promoted diets low in saturated fats (beef, pork, butter, cream) and high in mono-unsaturated fats (avocados, olive oil), showed decidedly lower risks of cardiovascular disease.Research by renowned Harvard nutritionist Walter Willett, who chaired the Nutrition Department for 25 years until this past January, has confirmed the pronounced benefits of the Mediterranean diet. In his 2000 book “Eat, Drink and Be Healthy,” Willett wrote that the “main elements of the Mediterranean lifestyle are connected with lower risks of many diseases.”Using data from Harvard’s Nurses’ Health Study (NHS), a long-term epidemiological probe into women’s health, Willett also concluded that “heart diseases could be reduced by at least 80 percent by diet and lifestyle changes.”Funded by the National Institutes of Health, the Nurses’ Health Study was established by Frank Speizer in 1976 to examine the long-term consequences of oral contraceptives. In 1989, Willett established NHS II to study diet and lifestyle risk factors. The results of that study have heavily influenced national dietary guidelines and the way Americans think about how they should eat.Recent studies have found that a healthy diet can also boost the brain and slow cellular aging. Chef Dino Licudine greets seniors at the Center Communities at Hebrew SeniorLife, which is affiliated with Harvard Medical School. Kris Snibbe/Harvard Staff Photographer“The picture that has emerged is that the traditional Mediterranean diet promotes health and well-being,” said Willett, the Fredrick John Stare Professor of Nutrition and Epidemiology. “The elements of a healthy diet were readily available in the Mediterranean, where people had to eat local fruits, vegetables, and fish. Back then, most people didn’t have much choice in what to eat.”Researchers also generally approve of both the vegetarian diet and the Asian diet because they also help increase longevity and decrease the risk of chronic disease. But the Mediterranean reigns supreme, because the Asian diet has salt and starch, and the vegetarian lacks important nutrients.A design for healthy eatingTo publicize everyday ways to eat better, researchers at the Harvard Chan School came up with the Healthy Eating Plate. It suggests eating more fruits and vegetables, whole grains, fish, lean poultry, and olive oil, and asks people to limit refined grains, trans fats, red meat, sugary drinks, and processed foods. In addition, it touts staying active.Harvard’s plate was a response to the U.S. Department of Agriculture’s (USDA) MyPlate, which, a comparison by Harvard nutrition experts suggested, could have gone further in detailing information about which foods to favor or limit.Graphic by Judy Blomquist/Harvard Staff. View more information.A 2012 Harvard study found that eating red meat led to increased cardiovascular disease and cancer mortality, and that substituting healthier proteins lowered mortality. As for milk, a source of calcium, Willett said there is no evidence that drinking more of it prevents bone fractures as much as physical activity does. Yogurt, because of its positive effects on the intestinal system, proves even more beneficial than milk.“Most populations along the world don’t drink any milk as adults,” said Willett. “Interestingly enough, they have the lowest fractures. And the highest bone-fracture rates are in milk-drinking countries such as northern Europe and the United States. Calcium is important all through life, but the amount of calcium that we need is probably overstated.”What is hard to overstate is the importance of eating healthily and mindfully through life, but the good news is that benefits begin as soon as the improved diet does. “If you’re still alive, it’s never too late to make a change in our diet,” said Willett.Recent studies have found that a healthy diet can also boost the brain and slow cellular aging. Researchers are examining the role of coffee and berries in improving cognitive function and reducing the risks of neurodegenerative diseases. At the same time, researchers keep circling back to the Mediterranean diet as a model of healthy eating.“The evidence is very encouraging because, even among old people, when they improve their diet quality, the risks of getting chronic diseases and mortality can be reduced, and longevity can be improved.”— Frank HuIn a 2015 study in Spain, seniors who ate a Mediterranean diet, supplemented with olive oil and nuts, showed improved cognitive function compared with a control group. Rich in antioxidants and polyphenols, chemicals that help avert the harm of “free radicals” in the body, the Mediterranean diet may even help prevent some degenerative diseases that, to some degree, are caused by vascular aging and chronic inflammation, Hu said.“Healthy, plant-based foods can improve vascular health, not just in the heart but in the brain,” he said. “And that can slow down the aging of the brain and cellular aging, and reduce the risk of Alzheimer’s disease and dementia.”As of now, science says the best prescription to slow the effects of aging is a mix of factors, from regular exercising to a healthy diet to maintaining a healthy body weight. Kris Snibbe/Harvard Staff PhotographerClues on biomarkers of agingThe research shows promising paths ahead. In a 2014 study, Hu found a correlation between the Mediterranean diet and telomere length, a biomarker of aging. Telomeres — caps at the end of chromosomes that protect them from deterioration — may hold a key to longevity. Their lengthening slows the effects of aging, and their shortening is linked to increased risks of cancer and decreased longevity.As of now, science says the best prescription to slow the effects of aging is a mix of factors, from regular exercising to a healthy diet to maintaining a healthy body weight.“Maintaining a healthy diet for a long period of time is more important than having a yo-yo diet,” said Hu. “The evidence is very encouraging because, even among old people, when they improve their diet quality, the risks of getting chronic diseases and mortality can be reduced, and longevity can be improved.”Hu said his own diet is a fusion of the Mediterranean, Asian, and vegetarian models, and he tries to combine the healthiest elements of each. In general, he avoids the problematic components of the Western diet: sugary foods, processed meats with high amounts of preservatives, sodium, and saturated fats.Yet he reminds even healthy eaters that it’s fine to indulge in treats occasionally. After all, a long life should be worth living, and food is one of its joys.
Building on Recovery Act provisions implemented earlier this year, the U.S. Small Business Administration announced today it can now provide surety bond guarantees on federal contracts valued at up to $10 million, if the contracting officer certifies that the guarantee is in the best interests of the government. An Interim Final Rule is available for public inspection at The Federal Register.Currently, under a related provision of the Recovery Act that was implemented in March, SBA can provide bond guarantees up to $5 million through September 2010 on all public and private contracts and subcontracts. SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace. Under the partnership, SBA provides a guarantee to the participating surety company of between 70 and 90 percent of the bond amount. Raising the surety bond limit is a critical step in making sure small businesses in the construction and service sector have access to federal contracting opportunities that will help drive economic recovery, SBA Administrator Karen Mills said. These changes support small and emerging businesses nationwide, particularly construction contractors who have seen their markets hurt by a poor economy and lagging construction.Additional program enhancements published in the rule include:a new small business size standard for this program;authorization for SBA to exercise discretion in deciding bond liability issues; and,a definition of Order issued under an Indefinite Delivery Contract.The new size standard (which will be in effect until Sept. 30, 2010) temporarily replaces the current size standard for the surety bond guarantee program. It states that a business is small if the business, combined with its affiliates, does not exceed the size standard designated for the primary industry of the business combined with its affiliates. The North American Industry Classification System (NAICS) Codes contained in 13 CFR Part 121 establishes size standards for all industries http://www.sba.gov/contractingopportunities/owners/basics/GC_SMALL_BUSIN(link is external)….Through its Bond Guarantee program, SBA will also help by guaranteeing bid, payment and performance bonds to protect the project owner against financial loss if a contractor defaults or fails to perform.Finally, the rule adds a definition for an Order issued under an Indefinite Delivery Contract to clarify that SBA bond guarantees apply to individual orders, as well as contracts.SBA assistance in locating a participating surety company or agent, and completing application forms, is available online. For more information on SBA s Surety Bond Guarantee Program, including Surety Office contacts, go online to http://www.sba.gov/osg/(link is external) , or call 1-800-U ASK SBA.Source: SBA. July 23, 2009.
Tech companies call for more renewable energy in Virginia utility’s resource plan FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):A letter from 10 technology companies targeting Dominion Energy Inc.’s future resources plan may be the first domino to fall in the sector’s push for more renewables to run their energy-hungry data centers.For the first time, cloud computing and internet companies may have the upper hand over utilities when it comes to increasing renewable power generation, Fitch Solutions Macro Research said in a May 13 note. As the world’s biggest consumer of electricity, the technology sector is looking to its sources of energy as a clear-cut way to demonstrate its sustainability initiatives amid pressure from customers, investors and governments.However, tech giants’ efforts to meet their environmental, social and governance goals have come face-to-face with their electricity providers’ energy portfolios, which often times relies on fossil fuels. Fitch Solutions notes that tech companies’ financial clout could push their utilities to start divesting from coal and gas.“Where tech companies are now the dominant customer and have the cash and the longevity to reliably pay up-front for future power suppliers, some power companies will begin to see their future investment strategies being dictated by external influences for the first time,” Fitch Solutions said.These differences could play out in Virginia, where a number of companies have located data centers. On May 1, 2018, Dominion’s local utility Dominion Energy Virginia doing business as Virginia Electric and Power Co. proposed its latest 15-year integrated resource plan to state regulators. Dominion plans to add about 3,670 MW of natural gas capacity and 4,720 MW of solar generation by 2033, but Fitch Solutions said some of the utility’s priorities, such as the Atlantic Coast Pipeline LLC, which would in part supply gas to the company’s power plants and an expected slow phase-in of the new solar resources do not mesh with tech companies’ sustainability goals.That prompted a slew of tech companies including Apple Inc., Amazon Web Services Inc., LinkedIn Corp. and Microsoft Corp. to sign a letter criticizing Dominion’s plan. While gas is technically the least expensive option right now, pairing solar with storage will likely become the more affordable option for power companies, particularly as energy efficiency technology continues to improve, the tech firms said in their May 8 letter.More ($): Fitch Solutions: Tech giants may have power over utilities on energy sourcing
Tables turned as justices are quizzed by lawyers Mark D. Killian Managing Editor From the usefulness of amicus briefs to protocol for who gets to answer questions during oral argument, members of the Bar had a unique opportunity to fire questions at the Supreme Court during the Appellate Practice Section’s discussion with the court program at the Bar’s Annual Meeting.“Openness is one of the high values of the court and I think it is especially helpful when we do this every year. . . because it gives you an opportunity to come and instead of being peppered with questions from the bench, you get to ask a couple of questions yourself,” Chief Justice Harry Lee Anstead told those gathered at the Bar’s June convention in Boca Raton.What follows are some of the questions posed to the justices: • When there are two or more lawyers on the same side during oral argument, is it permissible for a lawyer not already at the podium to rise to answer a question asked his colleague?Anstead said it makes “eminent good sense” that if the lawyer seated is better equipped to respond to that question to do so.“We are generally only concerned with the consumption of the time and getting our questions addressed, because that represents the concerns that the justices have going into the oral argument,” Anstead said. “I see no reason why someone can’t be called up to the podium to respond to a question like that.”Justice Charlie Wells, however, noted the 20 minutes allotted for argument goes fast and that if you waste your time “with people bouncing up and down” you risk breaking the continuity of the argument.“What you are really looking for is the questions the court asks as opposed to a presentation by lawyers,” Wells said. “You want the court to get out on the table the things that are troubling the court. So if you are not in a position where you can answer that, then the person who can had better pop up real quick.”Justice Pariente, who became chief justice a week after the Annual Meeting, also said the justices are less interested in hearing presentations from lawyers before them as getting their questions answered.“If you can get your name out without a question, you are in good shape,” Pariente said. • A bill which failed in the legislature last session would have created a sixth district court of appeal in Southwest Florida. Is the court considering this issue?Anstead said the court has a history of studying the issue, but no recommendation for the new DCA has made it past the subcommittee stage in recent years.“I think that is still an issue that bears examination and study,” Pariente said, noting the proposals made this year in the legislature came without any prior discussion with the court.“We have been told that this year, the new legislature may not be interested in that issue,” Pariente said.Pariente has, however, decided to study the workloads of the DCAs again and the potential need for a new DCA to be created “in a global way so it does not become a partisan football.”The bill this year tied the creation of a new DCA to the approval of any new judgeships. • What is the point of motions for rehearing when on the one hand lawyers are not supposed to reargue something they already argued in their brief and on the other are not supposed to make new arguments?“When I was an attorney, I always thought motions for rehearing at the Florida Supreme Court were a waste of time, because it is hard enough to convince three DCA judges to change their minds and it’s especially difficult to get seven Supreme Court justices to change their minds,” Justice Raoul Cantero said.Cantero did, however, say he had good experiences filing motions for clarifications where he essentially accepted the court’s holding “but said we also argued X and you did not address that.“I thought the court was much more open to that: not asking to redo the merits, but addressing this one issue,” he said.Pariente also noted motions for clarification often “look like motions for rehearing.” • Do amicus briefs help the court in deciding cases?Cantero said in the vast majority of cases amicus briefs add nothing to the case because they simply restate the arguments made by the parties involved.“The amicus briefs I thought were helpful were those that come from a different perspective,” Cantero said. “If the parties are arguing a constitutional issue, they argue a statutory interpretation issue.”Cantero said an amicus is also useful if it educates the court about what is happening on the same issue in other states.Pariente also said it is helpful when truly neutral organizations weigh in on the issue, especially in rules cases.“What we see are a lot of not friends of the court, but friends of the appellate or appellee,” she said. Tables turned as justices are quizzed by lawyers August 1, 2004 Managing Editor Regular News
Sign up for our COVID-19 newsletter to stay up-to-date on the latest coronavirus news throughout New York By Rashed Mian and Christopher TwarowskiWith the nation reeling in the wake of the largest mass shooting in U.S. history and biggest terror attack since 9/11, members of the Long Island LGBT community expressed sorrow, solidarity and defiance Sunday, resolving to honor those murdered by refusing to allow hatred to alter their way of life.At least 50 people were murdered early Sunday morning at the Pulse nightclub in Orlando, Fla., known as a hotspot for the Lesbian, Gay, Bi-sexual and Transgender (LGBT) community, when a gunman opened fire with an assault rifle. The attacker, Omar Mateen, 29, of Port Saint Lucie, allegedly declared allegiance to Islamist terror group ISIS during the assault, according to still-developing news reports.In an address to the nation Sunday afternoon, President Barack Obama characterized the massacre as an attack against all Americans and the subject of an open investigation by federal law enforcement agencies.“This was an act of terror, and an act of hate,” he said. “This could have been any one of our communities.”The killings are a “reminder that attacks on any American…is an attack on all of us,” continued Obama, stating that no act “of hate or terror will ever change who we are.”“In the face of hate and violence, we will love one another,” he added. “We will stand together as Americans.”More than 300 members and supporters of the local LGBT community showed unity with victims and their families, taking their defiance of fear and prejudice to the streets of Sayville in a “Visibility Walk” Sunday afternoon, carrying signs, pride flags and wearing rainbow-colored sashes.Collectively, they vowed to stand united in the face of violence and bigotry.Dean Carter, 23, a member of the LGBT group Pride For Youth, who moved from Orlando to Uniondale last year, told the Press that though he’d heard rumors of Orlando as being a potential terror target in the past, the news of the bloodbath at the gay club still hit him as a surprise.“To me, it’s kind of shocking, because people always say, ‘Orlando is a target,’ but, Orlando has never actually been the target of a terror attack, and usually, it’s aimed at Disney [World],” he said in a parking lot across from the Visibility Walk’s starting point, the Sayville LIRR train station. “For it to be aimed at a gay club…is kind of shocking to me.”Carter’s grandparents reside near Pulse nightclub, which he described as one of the most popular gay clubs in the city. Obama characterized the club as a “place of solidarity and empowerment” in his remarks, a sentiment echoed by others at the first-of-its-kind walk in Sayville Sunday.“Many of the gathering spots for our community are rooted in nightclubs and bars,” explained Erin Furey, a founding member of LGBTQA+ Visibility Coalition, a local gay and transgender advocacy rights group, after the parade.Furey lamented the lack of “safe places” for the LGBT community nationwide.“We live in a world, a country, and on an island, where trying to find a safe place is of dire importance,” she said.That void–and anti-gay rhetoric–breeds intolerance, she continued.“It really circles back to what happened today, because when social institutions and laws and governments, and people with a lot of influence, send a larger message that LGBT people are not okay, it does allow people to justify horrific acts of violence,” added Furey.David Kilmnick, CEO of LGBT Network, an LI-based gay rights group, stressed the need for tougher legislation protecting this community.“The deplorable act of violence that targeted the LGBT community and stole 50 lives and left scores of others injured, is a painful reminder of the gate and bias that continues to plague our country,” he said in a statement following the attack. “Our hearts and minds are joined with all the family, friends, and loved ones who are mourning today.”Joanna Morena, of Ronkonkoma, another co-founder of LGBTQA+ Visibility Coalition, told the Press she woke up to the horrific news of the massacre via social media, and immediately called her mother, who was in tears.The full significance of Sunday’s “Visibility Walk” and the full weight of the attack hit Morena and her wife hard as she drove to Sayville to join the march.“It just hit home how important walks like this are,” she explained. “To really be visible, be out, even informally, because, as far as far as we’ve come as a community, our transgender brothers and sisters are still without basic protections, and still, unfortunately, and apparently, still subject to attacks.”“When a tragedy like this happens,” she added, “we need to be together.”
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Read also: Indonesia taxes tech companies through new regulationTax office spokesperson Hestu Yoga Saksama said the Finance Ministry was now drafting a regulation to implement the Perppu’s provisions. The regulation will allow the government to instruct the digital companies, such as streaming giant Netflix and Swedish music streaming platform Spotify, to collect, pay and report charged value added tax (VAT).“We have started communicating with some of their [digital companies’] representatives in Indonesia. We hope that it [tax collection] will start taking effect in several months,” he told The Jakarta Post recently, citing the examples of similar practices conducted in Singapore, Malaysia and Australia.In Singapore, starting from Jan. 1, customers subscribing to overseas digital services have to pay a 7 percent goods and services tax after the Goods and Services Tax Act was passed in November 2018. The government’s move to roll out the legal basis for imposing taxes on digital companies operating in Indonesia might just be the beginning of its struggle going forward, with concerns surfacing over perceived unfair practices and the enforcement of the regulation.Government Regulation in lieu of law (Perppu) No. 1/2020 issued last week serves as the legal basis for the government to tax foreign companies with a “significant economic presence” that provide digital services and intangible goods from outside the country.The significant economic presence will be determined through the companies’ gross circulated product, sales and/or active users in Indonesia, the regulation reads. Indonesia has yet to gain significant state revenue from mushrooming digital companies offering and selling services in the country to date. One of the main reasons is that many of the digital companies operate from abroad, with no legal entity in Indonesia.The home screen for the Netflix Inc. original movie Two Popes pictured in this undated photo. (Bloomberg/Gabby Jones)Under the Perppu, the government is able to declare digital companies with a significant economic presence as permanent establishments, obliging them to comply with domestic tax regulations.Yoga confirmed the high state earning potential from the digital tax, which is expected to increase in the future. He, however, declined to give specific details with regard to potential income.Finance Minister Sri Mulyani Indrawati said recently that the government decided to tax the digital companies because their sales soared during the pandemic.“They will be the government’s tax base, especially such as today when we use Zoom or Netflix. The companies are not present in Indonesia so they can’t be taxed. But their economic activities are huge,” Sri Mulyani told a teleconferenced briefing.Netflix recorded US$20 billion of revenue globally in 2019, up by 31 percent from the previous year, of which more than $1 billion came from the Asia Pacific region. Meanwhile, Spotify clocked up $1.85 billion in 2019 globally, up by 24 percent from the previous year.Data website Statista has estimated Indonesian Netflix subscribers to number around 481,000 in 2019, a figure that has not been confirmed by Netflix. Statista also estimates the number of music streaming users in Indonesia to be 26.7 million, a 3.3 percent increase from the previous year.“Ultimately, it’s for governments to decide the rules on tax – and in every country in which we operate, Netflix respects those rules,” Netflix has said previously. “Taxation is an important and much-debated issue in Indonesia – and we’ve had conversations over the last few months with the tax authorities.”Read also: Indonesia accelerates tax reforms, cuts corporate income tax in COVID-19 playbookHowever, the upcoming digital tax has been met with caution by both digital service users and experts. Institute for Development of Economics and Finance (Indef) expert Andry Satrio Nugroho voiced concerns about a level playing field in the digital business landscape after the tax was imposed.“The government needs to establish a similar level playing field and convince business players that the government as a regulator will not use a regulation to hinder specific parties from competing,” he said, citing state-owned telecommunications company PT Telekomunikasi Indonesia’s (Telkom) decision to block Netflix services on its internet network.Telkom has contended that Netflix does not yet fully comply with Indonesian regulations regarding media content.“If the government plans to impose the tax on OTT [over the top companies], the government needs to also grow trust in the digital sector that discriminatory practices will not be not used by the regulator or state enterprises,” he stressed.Meanwhile, Indonesia ICT Institute executive director Heru Sutadi highlighted the concern over sanctions in the case of noncompliance by OTT companies in the future. “It’s not very easy to enforce the rules if the OTT headquarters are elsewhere,” he said.Read also: State revenue to contract 10% as businesses suffer, tax incentives take effect: Sri MulyaniBased on the Perppu, the sanction for tax regulation noncompliance could be a block on access to the digital service, after a warning. The Finance Ministry has pledged to work with the Communications and Information Ministry and Statistics Indonesia (BPS) in supervising the data exchange and employing sanctions.Heru also questioned the government’s coordination among ministries on enforcing the digital tax sanction, especially with the recent $1 million partnership between Netflix and the Education and Culture Ministry.“The strategy of foreign OTTs in Indonesia is always like that. If there is an institution that presses them, they will go to another institution to collaborate,” he said.Topics :