Competition between countries to attract and keep foreign investment is continuing to drive down corporate tax rates across the world. But initial indications suggest that governments are seeking to make up the shortfall in tax revenues by increasing indirect taxes, which may require companies to shoulder greater compliance and accounting standards.
This is the main conclusion of KPMG International’s latest survey which, for the first time, tracks both corporate and indirect tax rate trends, shedding light on the way in which overall tax revenue calculations made by governments affect the relationship between tax authorities and business.
The findings
Key findings are:
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Indirect taxes appear to be playing an increasingly important role in the revenue-gathering strategies of many countries around the world.
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This is a difficult policy for governments to follow because the link between higher indirect taxes and higher prices is obvious to anyone who buys goods and services, but the link between lower corporate tax rates and increased inward investment is less well understood.
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This has major implications for companies, their tax strategies and their accounting systems.
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And, of course, the survey gives valuable information on corporate and indirect tax rates around the world.
To download and read the survey in full, click here.
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