“Effective” tax rates take into account statutory rates plus tax-base items that affect taxes paid on new investment, such as depreciation deductions, inventory allowances, and interest deductions. Our calculations also account for other taxes that affect investment, such as retail sales taxes on capital purchases and asset-based taxes.
Effective corporate tax rates on business investments, 2010, in percent.
(Average of 83 nations covered: 17.7 percent)
France 34.0, Russia 31.9
UK 27.9, Italy 26.9,
Spain 25.4, Austria 25.3,
Norway 24.7, Germany 23.8
Sweden 18.9, Denmark 18.5, Finland 18.3,
Switzerland 17.6, Netherlands 16.8, Luxembourg 16.8,
Poland 14.3, Greece 13.0, Czech Rep. 12.0,
Ukraine 3.1, Belgium -1.7
US 34.6, Brazil 35.1,
Costa Rica 25.2, Peru 23.0,
Bolivia 22.9, Canada 20.5,
Ecuador 17.9, Mexico 17.5,
Japan 29.5, S. Korea 29.5
Australia 26.0, Pakistan 24.1
Indonesia 20.5, Malaysia 18.0
New Zealand 17.6, Thailand 17.0
China 16.6, Vietnam 11.7, Taiwan 10.9
Singapore 8.5, Hong Kong 4.0
These figures were also featured by the Alas, Oplas and Co. CPAs blog about two weeks ago.
Among the industrialized countries, the US. France and Russia top the list of having the highest effective corporate tax rates for businesses.
I wrote to Chris Edwards, the Director of Tax Policy Studies in Cato, why the Philippines was not included in the list of countries covered, considering that the Philippines is not really an "insignificant" economy. It is the world's 12th biggest country in population size, 30+ biggest in GDP size.
One of the authors replied that "No reason as I can recall. We built up this model in 2005 or 2006. But we will gradually expand the list of countries in the future. Will keep Philippines in mind."
Thanks for that. I personally wish to see how the Philippines would compare to its Asian neighbors at least. There are now talks of raising taxes in the country to cover the MDG goals, to plug the endless budget deficit, to reduce the ever-rising public debt.
Fiscal irresponsibility of the Philippine and many governments sucks. All they do is spend and spend, then borrow and borrow to plug whatever revenue shortfall, then tax and tax as the public debt keep rising and they still invent new programs that will bloat further expenditures and the public debt.