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The 10 Countries with the Lowest Tax Rates

It is said that there are only two things in life that are certain. These are death and taxes. As much as we hate paying it, taxes are integral and crucial elements for society to run properly and f

It is said that there are only two things in life that are certain. These are death and

taxes. As much as we hate paying it, taxes are integral and crucial elements for

society to run properly and for the bureaucracy to operate efficiently. It provides the

money for public health, education, infrastructure and other things that a country

needs.

Businesses, however, are always on the lookout for profit. The less expenses that

one incurs, the higher the profit. And taxes are expense items that can dent the

bottom line.

So which countries are the most friendly in terms of tax rates? Which countries charge

the least to a company in relation to the latter’s commercial profit? Here are the 10

countries with the lowest tax rates.

10 Bahrain – 15 percent

Bahrain is considered to be one of the fastest growing economies in the Arab world.

It is also the 12th freest economy in the entire world and is considered tops in the

entire Middle East region. The country is abundant in oil, with petroleum products

accounting for 60 percent of all exports and 70 percent of government revenues. It

also makes up 11 percent of the country’s gross domestic product. The country also

has a significant aluminum sector and vibrant finance and construction industries. It

does not impose any tax on profits, while labor tax stands at 14.6 percent. There are

also other taxes at 0.4 percent, though the entire tax burden is only 15 percent.

9 Saudi Arabia – 14.5 percent

Saudi Arabia is the second largest Arab country in terms of land area after Algeria.

It is considered as the birthplace of Islam and is the site of Mecca and Medina, the

two holiest sites in the Muslim world. It has been ruled by an absolute monarchy

ever since it was created. It owns the second largest reserves of oil in the world, with

the product accounting for more than 95 percent of its exports and 70 percent of its

revenues. It has a total tax rate of 14.5 percent, with labor tax amounting to 12.4

percent and profit tax at 2.1 percent.

8 Zambia – 14.5 percent

Zambia is a former British colony in the southern portion of Africa. It was named

by the World Bank to be the fastest economically reformed country in the world

in 2010. Still, the country’s rate of economic growth has not been able to cope up

with the increase in population. More than 2/3 of the population still lives below the

poverty line. It, however, has been trying to complement its economic reforms with

improvements in social sector delivery systems. It charges a profit tax of 1.5 percent,

plus other taxes at 2.6 percent. Total tax burden is 14.5 percent.

7 United Arab Emirates – 14.1 percent

The United Arab Emirates is an Arab country that is made up of seven principalities

that are each governed by an Emir. The principalities, or emirates, are Abu Dhabi,

Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. It has the

seventh largest reserves of oil in the world and the 17th largest resource of natural

gas. It is one of the most developed economies in West Asia, with a per capita

income that is one of the highest in the world. Total tax rate is 14.1 percent, all of

which come from the labor tax. There are no profit or other taxes charged.

6 Qatar – 11.3 percent

Qatar is an Arab country blessed with abundant oil and natural gas resources. It is

one of the richest countries in the world, with its citizens and residents enjoying the

highest GDP per capita anywhere. It also has one of the highest growth rates and

the country has the highest human development index in the Arab world. Total tax

rate is 11.3 percent, with no profit or other taxes.

5 Namibia – 9.8 percent

Namibia is a country in Africa that used to be part of South Africa. It gained its

independence in 1990. It is one of the least densely populated countries in the world.

Its main source of revenue is the mining industry because of the presence of gold,

silver, uranium, base metals and gem diamonds. It also has vibrant agriculture and

tourism sectors. Total tax burden is 9.8 percent, broken down to 4 percent profit tax,

1 percent labor tax and 4.8 percent other taxes.

4 Macedonia – 9.7 percent

Macedonia is a country in the southeastern portion of Europe that was a part of

the former Yugoslavia. It became an independent country in 1991. The World

Bank has ranked it as the fourth best reformatory state in 2009. It has an open

economy brought about by considerable reforms that have been introduced since its

independence. The total tax rate is 9.7 percent, with companies charged 6.3 percent

for its profits and 3.4 percent as other taxes.

3 Maldives – 9.3 percent

Maldives is an island nation located right in the middle of the Indian Ocean. It

is considered to be the smallest Asian country in terms of both land area and

population. It is also considered to be the lowest country on the planet, with its

highest natural point at only 2.4 meters above sea level. Its economy is mainly

driven by tourism, which accounts for 28 percent of GDP and 60 percent of foreign

exchange receipts. Total tax rate is 9.3 percent, though it doesn’t charge any profit or

labor tax.

2 Vanuatu – 8.4 percent

Vanuatu is an island nation located in the South Pacific Ocean. The main cogs of

its economy are agriculture, tourism, cattle-raising and offshore financial services.

There is practically no mining sector and small industries exist only to serve the local

market. Total tax burden is 8.4 percent, divided into 4.5 percent labor tax and 3.9 percent for other taxes.

1 Timor Leste – 0.2 percent

Timor Leste is a country in Southeast Asia. It used to be part of Indonesia before

it gained independence in 2002. It has discovered oil and gas reserves offshore

but most of the country still relies on subsistence farming. It charges a meager 0.2

percent in other taxes to companies doing business in the country.

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The 10 Countries with the Lowest Tax Rates