Indirect and Corporate taxes around the world

As a follow up to my previous post about income tax rates around the world, the good people at KPMG have come to the party and produced a report detailing current levels and recent changes to indirect and corporate taxes around the world.

The report can be downloaded here. Again, there is plenty of material to make a great little class research assignment (in conjunction with the income tax report. found here). The explanatory notes are also worth a read, particularly different countries approaches to administering a VAT. Some countries have numerous exemptions eg food, and some countries have no exemptions at all.

New Zealand has a very broad based system, which inevitably has become a political football. The current government has recently raised it to 15% and insist that exempting certain goods and services will make it costlier to administer and create distortions. The main opposition party wants to have it removed on fresh fruit and vegetables, which is generally politically popular. In fact the managing director of McDonald’s New Zealand has weighed in to the matter, supporting the move - the article can be viewed here.

What is clear from the report is that compared to a few years ago, indirect taxes are on the rise. The report states that “All around the world governments are reassessing their long-term tax policies. To create a more stable tax base, many are turning to indirect tax as a key part of the solution - this is being done through a combination of rate increases, broadening the base or, in some cases, introducing national VAT / GST regimes for the first time”