The tax rates remained steady across many countries worldwide this year, in view of the governments’ reduced emphasis on dealing with deficit by increasing the personal income tax rates. The report for this year was submitted by KPMG, which is renowned for its auditing, tax and advisory services. According to statistics, the top-tier income rates were at 29.6%, witnessing a reduction of 0.3% points. However, the trend cannot be attributed to the overall development in this year. Economies of 96 countries were studied, 15% of which did not change their tax rate. Also, all countries belonging to G-20 group kept their tax rate consistent as previous year. Spain, on the other hand showed a slight increase to 45% from a rate of 43% last year.
The figures below reveal the top-tier percentages for 11 countries:
Japan – 50%
Mainland China – 45%
Taiwan – 40%
Thailand – 37%
South Korea – 35%
India – 30%
Indonesia – 30%
Malaysia – 26%
Singapore – 20%
Hong Kong – 15%
Macau – 12%
In previous years, governments were seen to have taken steps to combat debt crisis and other economic deficits by reviewing the personal income tax rates. It was expected that the rates would undergo amendment in the year 2011, but they remained considerably stable. In order to attract investment from corporations and rich-elements, governments have been trying to decrease the personal income tax rates. On the other hand, taxes on consumer items have increased in the form of Value added tax and GST, the services tax. It seems like these taxes are meant to compensate for the tax benefit given on personal income. Data collected by KPMG also revealed that from the year 2003 to 2009, the income
tax rates have reduced in several countries across the globe. The trend was only reversed last year when European Union was met with crippling economic deficit. Hence, the 0.4% increase mentioned before.
This year, the steady tax rates were also characteristic of the economies of countries in the Asia-pacific region. Giants such as India, South Korea and China kept a consistent personal income tax rate. Talking about Singapore which had a 20% top-tier tax rate, it remained in competition with Hong Kong which had 15%. The 20% rate has been maintained since 2006 after being cut-down by 1% point that year. All citizens of Singapore with an income greater than $320,000 are all required to pay the personal income at a tax rate of 20%. The rate is quite low compared to other countries, which is why business opportunities in Singapore are so widely popular. Moreover, a decrease has also been witnessed in
the corporate income tax. Currently, it stands at 17% while in 2004; it was as high as 22%. On the other
hand, the GST has increased to 7%.
Business opportunities in Singapore have steadily increased due to the tax friendly atmosphere. Also, the presence of professional services that allow the hiring of a Singapore tax advisor have greatly helped corporations and individuals to resolve any problems related to taxation.