Top 10 countries with the simplest tax systems for living and business.
Top ten countries with the simplest tax systems
Recently a study was conducted aiming to compare tax systems of different countries to identify the simplest. It is worth noting the countries that became leaders of this peculiar ranking — in them taxation is the least complicated. In first place were the Maldives, where a businessman needs to pay just a single tax for the entire year. The tax rate is 9.1%, and the time required is 30 minutes. In Qatar there is also only one tax for entrepreneurs, but completing the necessary paperwork takes almost 36 hours. In third place is Hong Kong. In that country there are only three taxes: profit tax, property tax, and payroll tax, totaling 24.2%. Hong Kong and China differ substantially in their tax systems. This is a consequence of the fact that Hong Kong originally implemented laws granting it the status of a low-tax territory to facilitate financial operations.
The analysis carried out by the researchers led to a simple conclusion: taxation is simpler in the Middle East and in Asia. In Europe the tax collection system is complex and requires significant time. A pleasant exception was Ireland, which has only nine taxes. To pay them all takes 76 hours, while the tax share is 28.8%.
However, it should be mentioned that the researchers did not set out to analyze the relationship between the simplicity of a tax system and a country's level of economic development. Although the country that took first place is considered the most convenient for paying taxes, its level of economic development is not high. Residents of that country do not need to spend time to switch to the simplified tax regime (STS), but high incomes among the population are also not observed. By comparison, economically advanced Switzerland ranks only 19th. Developed powers with stable economies such as France and Belgium ended up in the middle of the list, taking 66th and 64th places respectively.
In our country even an application for the STS does not eliminate the need to pay numerous taxes and fill out endless forms. Efforts to simplify the taxation system for certain entrepreneurs, for example for those working as pboyul, nevertheless did not raise our country's ranking. A position in the second hundred is disappointing and clearly indicates that the system should be reformed. According to the researchers, completing all tax formalities in our country takes a full 56 days.