Offshore inflation demand to build slowly following IWT removal

Following Royal Assent to the Tax Laws Amendment Act 2009 on December 4, all Commonwealth government securities (CGS) are now legally eligible for exemption from the non-resident interest withholding tax (IWT). Although intermediaries say there has not been an immediate impact in terms of buying activity from offshore, they remain hopeful that the removal will stimulate offshore demand for inflation-linked CGS product in particular.