Governments to Implement New Tax Policies After the Global Financial Crisis: Survey by Glasser Harold

Governments to Implement New Tax Policies After the Global Financial Crisis: Survey After the recent global financial crisis, governments in different parts of the world are expected to implement new tax policies in an effort to strengthen their economies and raise more funds to recover the lost revenues related to economic downturn and the financial aid injected to ailing industries, according to a survey conducted by the KPMG International. The survey, titled “2010 Global Corporate and Indirect Tax Survey,” has revealed that a significant number of countries are considering, or at least in the process of implementing reforms to their tax systems to adapt in a highly globalized world. Also, the study which involved about 22,000 tax professionals, highlighted the need of most countries to change the corporate tax rate to remain competitive in the market and attract foreign and multinational companies. In a statement, KPMG global head of tax Loughin Hickey said the trend in most countries is the “reduction of corporate tax and shift to indirect taxes as the national revenue bodies have recognized that corporate taxes are becoming a less reliable source of income.” Hickey added that a shift to indirect taxes is seen by most governments as a more stable source of tax revenues, citing the “less mobile” movement of consumption taxes. According to findings, the average global corporate tax rate declined by 24.99 percent in 2010 from 25.44 percent in the previous year, while the average indirect tax increased by 15.61 percent from 15.41 percent. With this, KPMG has predicted that the indirect taxes will continue rising and the corporate rates will further decline. The professional service firm said that “more than 17 countries have announced plans for their impending tax reforms or have already changed their taxation system since last year.” Citing the survey’s result, KPMG Advisory LLP head of tax Tay Hong Beng said that the governments have to “balance their goals and consider the actions of other countries that are also reducing their corporate tax rates” in an effort to attract international companies and foreign businessmen and investors. Tay added that companies operating in several jurisdictions have to keep updated to the changing regulations especially in terms of taxation as this aspect can have a significant impact to the profits and the financial risks associated with double and triple taxation system. In late 2010 and early next year, Tay said they are expecting to see “many fluctuations in tax rates in many economies around the world.” Meanwhile, Singapore’s 17 percent corporate tax rate is currently the eight lowest among the countries the firm has surveyed, while its indirect tax rate of 7 percent is the fourth lowest. In response with this finding, Singapore’s leading business registration firm Rikvin said that the low corporate tax rates and the overall taxation system in the country are its main “attractions” to international and foreign companies, businessmen, and investors. “In Singapore, the taxation system is quite attractive. For example, it follows the singletier tax system in which the taxes are only deducted at a corporate level while the shareholders’ dividends are untouched. This is not the case in some countries which follow the double taxation which has a negative impact to a company’s profitability,” AsiaBiz said. About the Publisher: Rikvin is the leading Singapore Subsidiary Registration Specialist and has successfully helped thousands of foreign entrepreneur Start a Singapore Company . The firm provides a complete corporate solution under one roof for Singapore subsidiary company registration of private limited companies with the opening of corporate accounts, business registration including accounting, tax, immigration related to work passes visa and compliance services in Singapore. Rikvin PTE LTD Address: 20 Cecil Street, #1401, Equity Plaza, Singapore 049705 Phone: +6564388887 Website: http://www.rikvin.com