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To: Alex who wrote (14299)7/9/1998 6:23:00 PM
From: goldsnow  Respond to of 116770
 
EU to adopt law to exempt investment gold from VAT
11:51 a.m. Jul 09, 1998 Eastern
BRUSSELS, July 9 (Reuters) - European Union legislation to exempt
investment gold traded anywhere in the 15-nation bloc from value-added
tax will now be adopted after Italy formally lifted its objection at a
meeting in Brussels on Wednesday, officials said.

However, the timing of the final adoption of the legislation was not yet
clear as two countries have to consult national parliamentary committees
on European affairs before they can sign up to the text.

''It will be adopted once two parliamentary reserves are lifted: one
French, one Danish,'' one official said. ''It's not completely sure that
this can be done before the (EU's August break) because of the
parliamentary procedure in these two countries. But on the substance
there is agreement.''

The new legislation will exempt traded investment gold, defined as
having a purity of 995/1000 and coming in bar or wafer form with a
refinery stamp, from value added tax.

Gold coins are also deemed to be investments free of VAT if they were
struck after 1800 and their value does not exceed 180 percent of the
value of the gold they contain.

The legislation sets safeguards so that if investment gold is on-sold to
jewellery makers, or other users of industrial gold, it becomes liable
for VAT and the onus is on the buyer to pay and declare the tax.

The present system in some countries, such as Britain, where it was the
seller of the gold who had to declare VAT, had led to widespread evasion
by fraudsters buying tax-free gold in one country and selling it in
another and not declaring the tax.

Officials said Italy agreed to the new legislation after EU countries
agreed to make progress on dormant legislation precious metal hallmarks.

When adopted, the VAT law will contain a declaration committing the EU
to ''come to an agreement in order to remove all remaining obstacles
which exist and continue to act as a barrier to a single market in all
precious metals including gold,'' one official said.

((Brussels Newsroom +32 2 287 6830, fax +32 2 230 5573,
brussels.newsroom+reuters.com))

Copyright 1998 Reuters Limited.



To: Alex who wrote (14299)7/9/1998 8:57:00 PM
From: goldsnow  Read Replies (1) | Respond to of 116770
 
Alex model for Japan 1999...

On Japan's ''Cleopatra Island'' Hashimoto has refuge
02:30 a.m. Jul 09, 1998 Eastern
By Teruaki Ueno

KIKAI ISLAND, Japan, July 9 (Reuters) - There is at least one spot in
Japan, dubbed ''Cleopatra Island'' for its languid beauty, where
embattled Prime Minister Ryutaro Hashimoto can safely lay his head.

But to be absolutely sure, he should bring some money.

Surrounded by coral reefs and clear water, a sub-tropical paradise to
outsiders, this tiny island is a place where big spending on public
works by Hashimoto's Liberal Democratic Party has become the lifeblood
of the 9,000 residents.

Others may denounce billions of dollars spent over decades on
''pork-barrel'' projects nationwide as a reason for Japan falling this
year into its first recession since World War Two.

But here, 1,100 km (688 miles) southwest of Tokyo, where the Pacific
Ocean meets the East China Sea, there is no argument about the value of
big spending ahead of Sunday's polls for the Upper House of parliament.

It is to traditional LDP suppporters like those on the island that
Hashimoto is looking to for backing in an election that has become
almost a referendum on his economic leadership.

With no industry, most residents live on sugar-cane farming, and money
for projects like roads and bridges has poured into the island in the
decades since the World War Two.

''Public works projects are the key to the survival of this island,''
said Ryoji Nomura, the island's mayor.

Farming is dying as young people abandon island life to work in mainland
cities -- a trend that makes public works even more crucial.

There is an irony in what has become of Kikai Island.

It was one of the first places touched by an epoch-making visit to Japan
in the 1850s by Commodore Matthew Perry with his ''Black Ships'' -- a
squadron of U.S. Navy vessels -- that forced Japan to abandon two
centuries of isolation.

Perry was so impressed by the natural beauty of the island that he
called it ''Cleopatra Island.''

Despite its beautiful landscape, the population has been on the decline
since the war, dropping to some 9,000 in 1998 from more than 18,000 in
1940.

''Almost all boys and girls leave after graduating from high school and
they never come back because no jobs other than farming are available,''
said town official Hidemori Naoshima.

''Something must be done or there will be only ageing men and women on
this island,'' he said.

The LDP, which has dominated Japan's politics for most of the post-war
period, is cashing in on the islanders' thirst for government subsidies.
About nine in 10 islanders traditionally support the LDP, locals say.

Five candidates, including two from the LDP, are vying for two Upper
House seats in the constituency of Kagoshima on the southern main island
of Kyushu, which includes Kikai Island.

Kichio Inoue, running on an LDP ticket for a fifth six-year term, has
vowed to get more government subsidies to improve the island's
infrastructure.

''Public works projects are indispensable when the life and economy of
this remote island is in a severe condition,'' Inoue, a 75-year-old
former state minister, said in a campaign speech.

Hiroshi Moriyama, the other LDP candidate, says the island needs more
public money to match wealthy regions of Japan.

While Inoue is expected to win a seat, 53-year-old Moriyama is in an
uphill battle with Kazuto Kamiyama, an independent backed by the Social
Democratic Party and the Democratic Party.

Kamiyama, the incumbent, has denounced the LDP for public works spending
and demanded that Hashimoto step down.

The island's chronic reliance on cash from the central government stems
from Japan's defeat in World War Two.

In the last months of the war, the U.S. military dropped fire bombs,
killing more than 100 islanders and burning down hundreds of homes.
Following Japan's defeat, Kikai island was ruled by the U.S. military
for eight years.

Special measures to promote the island expire next March and the LDP has
pledged to renew them if it wins on July 12.

Apart from government subsidies, there is a 40 billion yen ($285
million) project to build a huge underground dam to revitalise farming
and lure back young people.

''I am quietly and humbly hoping that my son will come back to the
island,'' said Tamao Mitsukura, a 71-year-old sugar-cane farmer.
Mitsukura's 40-year-old son works in Tokyo.

Not all islanders are optimistic.

''I really doubt young people will come back because of the dam,'' said
Fukutoshi Asazaki, the owner of a supermarket.

Residents are also locked in a battle over a plan to build a
communications facility called the ''Elephant Cage'' that could be used
by the Japanese and U.S. military.

Local authorities say the facility, designed to detect hostile aircraft,
would create jobs and revive the economy.

But anti-war activists say poverty on the island is being exploited and
making it a target for attack in a war.

''Why Kikai Island? Why not an uninhabited island somewhere else?'' said
Kuniaki Maruyama, a Christian pastor.

($1-140 yen)

((Tokyo Newsroom +81-3 3432 8018

tokyo.newsroom+reuters.com))

Copyright 1998 Reuters Limited.