Taiwan’s business sector pays lower taxes than in China or Japan, but more than in Singapore and Hong Kong, a joint report by the World Bank and accounting firm PwC showed Thursday.
According to the 2017 Paying Taxes report, the total tax rate in Taiwan’s business sector, which is calculated as a percentage of commercial profit, was 34.5 percent, little changed from the 2016 report.
Taxes and contributions considered in the report include corporate income tax, social contributions and labor taxes paid by employers, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transaction taxes, waste collection taxes, vehicle and road taxes, and any other small taxes or fees, according to PwC.
The 2017 report showed that while Taiwan’s total tax rate was 34.5 percent, China’s was 68 percent and Japan’s was 48.9 percent.
However, Hong Kong had a lower rate of 22.9 percent and Singapore of 19.1 percent, while South Korea’s was 33.1 percent, according to the report.
The 2017 Paying Taxes report calculated the burden of tax costs and compliance for medium-sized manufacturers with annual revenue of at least NT$650 million (US$20.44 million), in 190 countries.
The report, now in its 11 edition, serves as one of the major indicators for the World Bank’s annual Doing Business report, PwC Taiwan said.
According to the latest report, Taiwan was 30th in terms of business-friendly tax regime rankings, up nine notches from the previous year after significant improvements in its “post-filing process,” which measures the efficiency of a tax regime.
A company in a developed economy spends about eight hours to complete its tax refund process, while in a developing economy the process takes about 27 hours, PwC Taiwan said.
It said Taiwan should seek to improve its tax regime and strive for a balance in terms of economic development, total tax revenue and social welfare.
In addition, Taiwan needs greater transparency in its tax policy and tax administrative affairs so as to attract more foreign investors, PwC said.
Source: Focus Taiwan News Channel