Global tax reforms concentrate on simplification of the tax codes and cutting down taxes on investment and savings. A large number of nations have reduced income tax rates over the past few years for pulling in foreign direct investments (FDIs) as this kind of investment helps in developing a country from different aspects. In Eastern Europe, there has been a significant attempt for tax reforms and numerous nations have enforced flat income tax rates on individuals. In a number of European countries and other countries, corporate income tax rates have been substantially minimized. As the present economy is influenced by globalization and it is quite competitive in nature, it is important for all the countries in the world to keep themselves updated with the global and international tax reforms that are happening. Global tax reforms encourage investment, growth in income, development and competitiveness of the economic system.
The reductions in individual and corporate income tax rates and the introduction of flat tax have stimulated economic resurgence in erstwhile stagnant economic systems.
The following nations are regarded as the leaders in tax reform all over the world:
- Ireland
- Hong Kong
- Latvia
- Lithuania
- Russia
- Hungary
- Slovakia
- Ukraine
- Serbia
- Georgia
- Poland
- Romania
- Estonia
Top Statutory Rates of Income Tax, 2005
| Country | Individual | Corporate |
Countries with Individual Flat Taxes
| Georgia | 12.0% | 20.0% |
| Estonia | 24.0% | 24.0% |
| Lithuania | 33.0% | 15.0% |
| Latvia | 25.0% | 15.0% |
| Russia | 13.0% | 24.0% |
| Romania | 16.0% | 16.0% |
| Slovakia | 19.0% | 19.0% |
| Serbia | 14.0% | 14.0% |
| Ukraine | 13.0% | 25.0% |
| Flat tax countries | 18.8% | 19.1% |
Other Nations and Regions
| Hong Kong | 16.0% | 17.5% |
| Czech Republic | 32.0% | 26.0% |
| Ireland | 42.0% | 12.5% |
| Hungary | 38.0% | 16.0% |
| Singapore | 22.0% | 20.0% |
| Poland | 40.0% | 19.0% |
| United States | 38.6% | 39.5% |
| Europe: 25 nations | 40.6% | 26.6% |
Source: http://www.cato.org/pubs/tbb/tbb-0511-28.pdf
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