It is said that there are only two things in life that are certain. These are death andtaxes. As much as we hate paying it, taxes are integral and crucial elements forsociety to run properly and for the bureaucracy to operate efficiently. It provides themoney for public health, education, infrastructure and other things that a countryneeds.
Businesses, however, are always on the lookout for profit. The less expenses thatone incurs, the higher the profit. And taxes are expense items that can dent thebottom line.
So which countries are the most friendly in terms of tax rates? Which countries chargethe least to a company in relation to the latter’s commercial profit? Here are the 10countries 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 theentire Middle East region. The country is abundant in oil, with petroleum productsaccounting for 60 percent of all exports and 70 percent of government revenues. Italso makes up 11 percent of the country’s gross domestic product. The country alsohas a significant aluminum sector and vibrant finance and construction industries. Itdoes not impose any tax on profits, while labor tax stands at 14.6 percent. There arealso 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, thetwo holiest sites in the Muslim world. It has been ruled by an absolute monarchyever since it was created. It owns the second largest reserves of oil in the world, withthe product accounting for more than 95 percent of its exports and 70 percent of itsrevenues. It has a total tax rate of 14.5 percent, with labor tax amounting to 12.4percent 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 namedby the World Bank to be the fastest economically reformed country in the worldin 2010. Still, the country’s rate of economic growth has not been able to cope upwith the increase in population. More than 2/3 of the population still lives below thepoverty line. It, however, has been trying to complement its economic reforms withimprovements 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 principalitiesthat 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 theseventh largest reserves of oil in the world and the 17th largest resource of naturalgas. It is one of the most developed economies in West Asia, with a per capitaincome that is one of the highest in the world. Total tax rate is 14.1 percent, all ofwhich 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 isone of the richest countries in the world, with its citizens and residents enjoying thehighest GDP per capita anywhere. It also has one of the highest growth rates andthe country has the highest human development index in the Arab world. Total taxrate 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 itsindependence 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 andtourism 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 ofthe former Yugoslavia. It became an independent country in 1991. The WorldBank has ranked it as the fourth best reformatory state in 2009. It has an openeconomy brought about by considerable reforms that have been introduced since itsindependence. The total tax rate is 9.7 percent, with companies charged 6.3 percentfor 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. Itis considered to be the smallest Asian country in terms of both land area andpopulation. It is also considered to be the lowest country on the planet, with itshighest natural point at only 2.4 meters above sea level. Its economy is mainlydriven by tourism, which accounts for 28 percent of GDP and 60 percent of foreignexchange receipts. Total tax rate is 9.3 percent, though it doesn’t charge any profit orlabor tax.
2 Vanuatu – 8.4 percent
Vanuatu is an island nation located in the South Pacific Ocean. The main cogs ofits economy are agriculture, tourism, cattle-raising and offshore financial services.There is practically no mining sector and small industries exist only to serve the localmarket. 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 beforeit gained independence in 2002. It has discovered oil and gas reserves offshorebut most of the country still relies on subsistence farming. It charges a meager 0.2percent in other taxes to companies doing business in the country.