Rabu, 30 Oktober 2013

The Star Online: World Updates

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The Star Online: World Updates

Mexico plan to beef up tax revenues nears final Senate approval


MEXICO CITY (Reuters) - Mexico's Senate on Wednesday was close to passing a package of measures to bolster the country's weak tax revenues, including higher taxes for the rich, levies on sugary drinks and junk food, as well as a charge on stock market gains.

After giving general approval to the fiscal bill late on Tuesday, the Senate must still vote on divisive sections that lawmakers want to repeal or amend, a process which has been held up by opposition from conservatives.

On Wednesday evening, leftist opposition lawmakers said they had agreed to changes that would further lower the bill's overall tax take and require the reform to be sent back to the lower house for final approval ahead of an end-of-Thursday deadline.

The fiscal reform is one the main planks of President Enrique Pena Nieto's economic agenda, and although it will not raise as much new revenue as had originally been hoped, it has prompted vigorous attacks from opponents and lobbyists.

Disputes over the bill, which aims to introduce a new top income tax rate of 35 percent, risk complicating negotiations over other reforms sought by the Revolutionary Institutional Party, which lacks a majority in Congress.

At the centre of the president's reform ambitions is his proposal to open up the state-run oil industry to more private capital. On this front, the PRI is banking on assistance from the conservative National Action Party, or PAN.

But the PAN has been at loggerheads with the PRI over the fiscal reform, forcing the PRI to work with the leftist Party of the Democratic Revolution (PRD) to improve the tax take. The PRD, by contrast, is against Pena Nieto's energy reform.

The PAN walked away from the Senate debate on proposed amendments to the fiscal bill early on Wednesday after accusing the PRI of not taking its concerns seriously.

The PAN was upset when it failed to stop the standard rate of value added-tax of 16 percent from being extended to border states that now pay an 11 percent rate, and has said it will not return to debate the proposed amendments.

Senators took up discussion of the bill again on Wednesday evening, with lawmakers expecting a speedy vote on the reform that will boost Mexico's tax receipts by less than the previously estimated 2.7 percent of economic output by 2018.

Senators said they did not yet have an estimate for the impact the agreed-to changes would have on overall tax receipts.

"Without a doubt it's a decrease in revenues that will mean a decrease in spending," said PRD Senator Armando Rios Piter, who negotiated changes to the bill with the PRI.


Once the fiscal reform is passed, Congress will set about approving Pena Nieto's energy overhaul, which aims to lure private capital with profit-sharing contracts.

But the PAN feels Pena Nieto's model does not go far enough to attract major investment, and lawmakers in the party have pledged to pressure the PRI into providing greater incentives to oil companies, such as production sharing contracts.

That could put the president under attack from leftists who accuse the government of wanting to sell out Mexico's oil wealth to foreigners and could mobilize large protests.

The PAN may also push the PRI for a more radical electoral reform aimed at weakening the PRI's hold on power in Mexico.

The tax overhaul is a part of a series of reforms that Pena Nieto hopes will strengthen the economy and help boost a growth rate that has lagged that of other major emerging markets.

Earlier this month, the lower house watered down the tax bill, throwing out some measures including plans to apply the sales tax to rents, mortgages, property transactions and school fees.

At the same time, the PRI, supported by the PRD, modified the fiscal reform to lift top income tax rates, pushing more of the burden onto the richest section of society.

Roughly half of Mexico lives in poverty, while much of its wealth is concentrated in the hands of a few powerful families like that of billionaire telecoms mogul Carlos Slim.

The top rate of income tax in Latin America's No. 2 economy is currently 30 percent, but the reform sets out a sliding scale of higher rates capped at 35 percent for those earning more than 3 million pesos (145,490 pounds) a year.

PRD senators said they had agreed with the PRI to keep the income tax rate for those who earn between 500,000 pesos and 750,000 pesos at 30 percent, versus a proposed 31 percent.

They also agreed to raise a planned levy on junk food from 5 percent to 8 percent, and increase the percentage of workers' benefits that companies can deduct from their total tax bill.

Changes to the reform require the bill to be sent back to the lower house of Congress.

Changes to the tax bill in the lower house in mid-October created a shortfall in the budget plan for next year.

That prompted lawmakers to raise the government's oil revenue estimate and make other changes to close the gap. These are due to be voted by the Senate by October 31. The tax bill is tied to the budget, which must be approved by mid-November.

(Additional reporting by Dave Graham and Alexandra Alper; Editing by Simon Gardner and Ken Wills)

China's state media calls for strong action on Tiananmen attack


TURPAN, China (Reuters) - Chinese state media demanded severe punishment on Thursday after the government blamed militants from restive Xinjiang for an attack in Tiananmen Square, as the exiled leader of the region's Uighur minority called for an independent probe.

An SUV burst into flames on Monday after being driven into a crowd in Beijing's Tiananmen Square, the symbolic centre of China's power structure and one of the country's most closely guarded areas. The three occupants and two bystanders were killed, and dozens were injured.

Police said it was a "terrorist attack" carried out by people from Xinjiang, home to the Muslim Uighur people, and announced they had caught five accomplices who were planning holy war.

The ruling Communist Party's official People's Daily said the attack was a crime against humanity, adding that the government should spare no effort to ensure Beijing's safety.

"Violent terrorist crime is the shared enemy of all humanity, the shared enemy of all ethnic groups in the country, and it must be severely punished under the law," it said in an opinion piece on its website.

"Maintaining the capital's security and stability is a responsibility of utmost importance."

The English-language China Daily said the perpetrators will "go down in history as murderers not heroes".

Many Uighurs chaff at Chinese controls on their religion, culture and language, despite the government's protestations they enjoy widespread freedoms. Xinjiang has been beset by violence, blamed by China on Uighur separatists and extremists.

But Rebiya Kadeer, president of the Munich-based World Uighur Congress, the main exiled Uighur organisation, cautioned against believing China's account of the incident.

"Chinese claims simply cannot be accepted as facts without an independent and international investigation of what took place in Beijing on Monday," said U.S.-based Kadeer, who lives in the Washington area.

China calls Kadeer an "anti-Chinese splittist" and will almost certainly ignore her call for an international investigation. Authorities have said five suspected Islamist militants have been apprehended in connection with the incident - all of whom have names that suggest they are Uighur.

Authorities have moved to tighten security in energy-rich Xinjiang, and armed police prevented Reuters reporters from entering Lukqun, where one of the detained suspects is from, sending them back to the nearby city of Turpan.

Asked whether she believed Uighurs were responsible, Kadeer said: "Maybe and maybe not. It is difficult to tell at the moment, given the strict control of information by the Chinese government on this tragic incident."

"If the Uighurs did it, I believe they did it out of desperation because there is no channel for the Uighur people to seek redress for any kind of injustice they had suffered under Chinese rule," she added.

Her comments were made in written replies to Reuters questions, translated from the Uighur language by an aide.

Kadeer is a former Chinese political prisoner accused of leaking state secrets in 1999 who left China on medical parole and settled near Washington with her husband and part of her family in 2005. The 66-year-old mother of 11 previously had been a celebrated millionaire who had advised China's parliament.

Kadeer said she feared the Tiananmen Square attack would join a long list of incidents that China uses "to justify its heavy-handed repression" in her native region.

She said she did not believe there was any kind of organised extremist Islamic movement operating in Xinjiang, a view shared by many rights groups and some experts.

"It is almost impossible for Uighurs to organise because of China's stringent controls and attacks."

(Additional reporting by Megha Rajagopalan in BEIJING and Paul Eckert in WASHINGTON; Writing by Ben Blanchard; Editing by Raju Gopalakrishnan)

U.S. spy agency's defence: Europeans did it too


WASHINGTON (Reuters) - The political uproar over alleged U.S. eavesdropping on close European allies has produced an unusual defence from the National Security Agency: NSA says it was the Europeans themselves who did the spying, and then handed data to the Americans.

It is rare for intelligence officials to speak in any public detail about liaison arrangements with foreign spy agencies because such relationships are so sensitive. Even more unusual is for the United States to point fingers at partners.

But that is what NSA Director General Keith Alexander did at a public congressional hearing on Tuesday when, attempting to counter international complaints about the agency's alleged excesses, he said its sources for foreign telecommunications information included "data provided to NSA by foreign partners."

Alexander's disclosure marked yet another milestone in NSA's emergence from the shadows to defend its electronic surveillance mission in the wake of damaging revelations by former agency contractor Edward Snowden.

"It is true that in general we stay close-mouthed about intelligence liaison relationships and we only speak in the most general terms about sharing things with our friends and allies," said Paul Pillar, a former senior CIA analyst.

But, he said, there was nothing wrong in correcting information that was out in public, even though Alexander probably "created or exacerbated some political problems" for a number of European allies with his comments.

"Given the hypocrisy being exhibited by the Europeans in saying they are 'shocked, shocked' that these sorts of things go on - allies spying on allies - I don't think we should feel much compunction about having them feel a little bit of domestic political heat if that is necessary to set the story straight in one of our own congressional hearings," Pillar said.

One U.S. official said that before going public with the revelation that telecommunications metadata was collected and supplied to the United States by foreign governments like France and Spain, the Obama administration consulted with the governments concerned. The official spoke on condition of anonymity.

Metadata refers to information about a phone call or email - the length of a call and the number dialled, for example - that does not include the communication's actual content.

A second U.S. official said that, regardless of foreign governments' reactions, some Obama administration officials wanted to make the information public anyway because they were disappointed at how allies were willing to let Washington take the heat for surveillance activities in which they themselves were partners.

Since early June, the NSA has been forced to defend its eavesdropping operations in public after Snowden leaked information about top-secret spy programs that collect phone, email and social media records, including those generated by Americans, to writers and media outlets, including Britain's Guardian and the Washington Post.

The NSA continues battling the perception its programs are large and intrusive. The Post reported on Wednesday that the agency has tapped directly into communications links used by Google and Yahoo to move huge amounts of email and other user information among overseas data centres.


Reports that the United States was eavesdropping on the phone of German Chancellor Angela Merkel and spying on the leaders and citizens of some of its closest European allies - Germany, France, and Spain - drew harsh criticism across Europe.

Mike McConnell, a former NSA director, said at a Bloomberg Government conference on Wednesday that Merkel should not have been surprised about alleged U.S. eavesdropping on her cellphone because world leaders are prime targets for such spying.

"The number one target on the globe is the president of the United States. By everyone," he said. "All nation states do this."

Pillar said this cuts both ways: during the recent U.S. government shutdown, European allies were probably scrambling to get as much intelligence as possible about the state of play in Washington, he said.

Senator Dianne Feinstein, chairman of the Senate Intelligence Committee, said this week that the White House had informed her intelligence collection on U.S. allies "will not continue."

But it is unclear whether that represents a blanket ban.

The NSA uproar prompted delegations from the European Union and Germany to descend on Washington demanding answers.

After meetings in Washington, a delegation of European Parliament members expressed dismay that U.S. officials had provided "no satisfactory reply" to questions regarding the allegations that the NSA had eavesdropped on Merkel's phone calls and those of leaders of unnamed countries friendly to the United States.

In a communiqué, the delegation also said it had received no clarification as to what the White House knew about this alleged NSA eavesdropping.

The delegation warned that if the U.S. response to European concerns about surveillance proved too feeble, that could further damage commercial, diplomatic and legal relations.

On Wednesday U.S. national security adviser Susan Rice held a meeting at the White House with her German counterpart in an effort to ease the transatlantic tensions.

U.S. Director of National Intelligence James Clapper and NSA Deputy Director Chris Inglis also participated, American officials said.


European media have pointed to an NSA slide published by France's Le Monde newspaper as showing that the United States was collecting bulk telephone data on millions of European citizens. But U.S. officials say that slide was misinterpreted.

A U.S. national security official said that the slide actually referred to a program under which French authorities supplied to U.S. intelligence agencies large amounts of raw telephone call data.

That data related to communications transmitted outside France but that passed through telecoms systems or switches to which France had direct, or at least readier, access than NSA itself.

The official indicated that this same scenario applied to allegations regarding the NSA collection of large amounts of metadata in Spain.

Another U.S. official familiar with NSA programs said that the metadata collection was inaccurately characterized in French and Spanish media reports.

It was collected by those governments themselves and turned over to the United States, and the collection was conducted on targets outside of their countries in war zones or countries that are major targets for Western counter-terrorism operations, the official said.

Some of that information, one U.S. official said, helped in investigating at least three counter-terrorism cases in which leads emerged that proved to be productive.

There is "nothing scandalous" about such cooperative joint collection, the official insisted.

(Additional reporting by Deborah Charles; Editing by Warren Strobel and Xavier Briand)

Kredit: www.thestar.com.my

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