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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Alex Molnar who wrote (8932)	3/4/2000 6:21:00 AM
From: sea_urchin	Read Replies (2) \| Respond to of 81145

Thanks Alex. I appreciate your sentiment which is not misplaced. By the way, I did find the KPMG URL myself. I'm still uncertain what credit will be available on foreign source dividends eg whether withholding taxes have been taken at source and, if so, whether the SAf government will allow the credit. The new tax on foreign source dividends will really be a bind because, in order to protect against persistent rand devaluation, residents attempted to invest directly or indirectly in some source of non-SAf income, as a rand hedge. In this regard, for the reasons I outlined in my post to Bob, gold related investments have not performed properly as a rand hedge. Clearly, the SAf government has launched a two-pronged attack on the local investment community: (a) tax on foreign dividends (b) devalue the currency Net effect is that the increased nominal returns from rand hedge investments will pass to the state. From next year there is a further hurdle as capital gains tax kicks in. I appreciate that taxation of foreign source dividends and CGT are normal in first world countries but, in the situation of a continually depreciating currency of a fourth world country, I think they will be penal.