Ah - to be in the land of Tir na nOg!
February 8, 2005When I see reports that the President is considering raising corporate tax rates, I can’t help but ask - what in the world is she thinking? This isn’t going to raise funds for the government; it may work in the short run, but certainly not in the long run. Big Business today - her real target - has no loyalty to the Philippines and can easily repatriate their profits and reorganize to minimize their tax liabilities.
Two years ago, if you picked up some Colgate toothpaste in your local supermarket, you would see a curious declaration (that went something like this):
Manufactured in Indonesia, by Colgate-Palmolive Indonesia
For Colgate Palmolive Headquarters in Hong Kong
Distributed by Colgate PalmOlive Philippines.
That’s strange. I thought to myself - why are they saying this? It seems to me like a declaration Colgate-Palmolive was making for the benefit of the tax authoritites. Here’s my analysis:
Hong Kong is the ideal place to set up a Global HQ. Corporate tax rates are only 17%, and most importantly - businesses are only taxed on local profits, and not on profits earned outside HK! What was happening here was that CP HQ was buying the toothpaste from CP Indonesia for a very cheap price, then selling it to CP Philippines for a very expensive price. The net result is that CP Philippines & Indonesia would declare a very modest profit (where tax rates are high) whereas CP Hong Kong would keep the profits in HK and thus pay no taxes on foreigh-sourced income! Brilliant!
A really cool business Idea
Here’s an idea that’s been percolating in my head for the last 2 years. I was stunned to see my phone bill after a trip I made to Las Vegas some time ago. Included in the roaming bill were charges for unanswered incoming calls. People would call me at night (while I was sleeping), and I would be, of course, unable to answer those calls. Sometimes the calls would come in while i was at a trade show, where the noise would be so loud that i would be unable to hear the phone ringing. The net result was that I was charged about $3-$4 per unanswered call! Sometimes people (in Manila) would call me twice or thrice, not knowing that I was travelling.
Equally irritating was that calls made within the US would be charged at international rates, rather than at local rates. So rather than pay 25c/min for a local call, I’d be paying $2-$3 per minute for intra-state calls! So using a Globe or Smart mobile was useless. I was better off buying a local prepaid calling card for calls I made within the US (as well as calls to Manila).
The obvious solution - was to buy a US Carrier’s prepaid GSM SIM. But none was to be found at the airport, nor at the hotel, nor at the strip. So I thought - hey! wouldn’t it be a great idea to set up a website that sold International GSM SIMs to the public, and set up some online chat software for people to make inquiries about, as well as set up a US/European phone number for them to call?
