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What might be the reason for arcadia to eliminate the tax

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Reference no: EM132908646

Problem 1: The Tax Office of Arcadia (a fictitious country) just announced that it would scrap the 20% withholding tax imposed on interest payments paid to foreign investors holding Arcadian government bonds. Until now, investors from countries with a double-taxation agreement with Arcadia had to wait for two years to claim back a portion of the interest that was withheld. What might be the reason(s) for Arcadia to eliminate this tax?

Reference no: EM132908646

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