Commissioner, International Market, Taxation and Customs Union
Frederik “Frits” Bolkestein is on a mission: to solidify the idea of a single European market. To that end, the former Dutch politician, who served his country as Minister for Foreign Trade and Minister of Defense, believes that the EU needs more tax reform if it and its corporations are to remain competitive. So, Bolkestein is urging a single consolidated tax base, and has called it “one of the most burning issues at EU level today.” With such a system, he argues, costs will be reduced, transfer-pricing issues will be solved, and dual-taxation problems will be eliminated. Whether a consolidated tax base will be enacted is another story since, like most changes in the EU, it involves overwhelming political and technical hurdles. But it will be necessary, Bolkestein believes, if the EU has any real hope of becoming the world’s most competitive economy by 2010.
Commissioner, Large and Mid-Size Business Division, IRS
Since coming to the IRS in December 1999, Langdon has worked to make the agency more responsive to its “customers,” as he calls America’s tax-paying corporations. Under his direction, the LMSB has implemented organizational and other changes resulting in improved service and more-timely dispute resolution. Langdon, the former vice president of tax for Hewlett-Packard, has attracted some top-notch talent to the division, which audits the most-complicated companies. During the IRS’s recent four-month grace period for people and firms to come forward with questionable tax shelters, 577 disclosures — including some from 120 corporations — were netted.
Lee Hsien Loong
Deputy Prime Minister; Minister for Finance; and Chairman, Monetary Authority of Singapore
Growing up, Lee watched his father, former prime minister Lee Kuan Yew, win foreign executives’ trust (and money) to transform Singapore from a backwater to an international financial center. Now, with many of those investors straining toward China, the younger Lee, age 50, is moving aggressively to keep them on the island. He’s opened the banking sector wider to foreign institutions since taking over the MAS (a monetary, banking, and financial policy-maker and regulator rolled into one) in 1998. His budget this year calls for corporate income tax rates to plunge from 24.5 percent to 20 percent over the next three years, costing the country 9 percent of its annual tax revenues and creating uncharacteristic budget deficits. With “minister for finance” added to his title last year, he’s widely expected to succeed current prime minister Goh Chok Tong.
Director of International, Inland Revenue
Gabs Makhlouf’s day job is director of international for the UK’s Inland Revenue. In that capacity, he has helped develop a Code of Conduct for tax havens within the EC. But it’s in his role as chairman of the Committee of Fiscal Affairs at the Organization for Economic Cooperation and Development (OECD) — from which he has launched a parallel international crackdown on tax havens — that Makhlouf, 41, has made news this year. The OECD’s assault on harmful tax practices and regimes that “facilitate tax cheating and distort the market for financial services” began in 1998. In April, though, the OECD announced that most of the 41 financial centers targeted (7 remained on the list) had agreed to make key changes. Makhlouf, whom colleagues describe as highly articulate and experienced, must also be a consensus-builder, since nothing at the OECD proceeds without the backing of all 30 of its members.
Director, China’s State Administration of Taxation
With the WTO demanding that China treat foreign and domestic businesses equally, Jin’s new job is to ax the low 15 to 17 percent tax rates foreign companies have enjoyed for the past 20 years. Given the massive influx of foreign direct investment the breaks have stimulated — up 28 percent to $46.8 billion last year — the 58-year-old former state cabinet member has said that he’ll move slowly on finding a happy medium with the current 33 percent domestic rate, and that existing firms will be grandfathered into the favorable tax rates. Meanwhile, Jin has already ordered more staff to be trained in auditing, particularly on transfer-pricing schemes that often provide loopholes for foreign companies.
U.S. Trade Representative
A senior official under the previous Bush Administration, 48-year-old Zoellick is charged with averting trade wars by negotiating taxes, tariffs, quotas, and the like with U.S. trading partners. His reputation as an intellectual and his famous friendship with EU trade commissioner Pascal Lamy have helped ease some of the conflicts he inherited (including EU restrictions on U.S.-distributed bananas). But Zoellick hasn’t shied away from conflicts either, vigorously defending controversial tariffs on U.S. steel imports. His power, though, hinges on a critical home-front battle: getting Congress to approve “fast-track authority” that would allow him to craft deals on the fly, without congressional interference.