Taiwan has gained significant headway in the ease of paying taxes, moving from 39th to 30th place worldwide, PricewaterhouseCoopers LLP’s (PwC) Paying Taxes 2017 report said.
While favorable tax terms carry heavy weight in global investment decisions, multinational corporations assign more importance to tax policy predictability, transparency and consistency, said the report, which is part of the World Bank’s Doing Business project.
“The improvement in ranking has much to do with the introduction of a new criterion — post-filing — that aims to measure the time it takes for tax authorities in different countries to process return applications,” PwC Taiwan financial services leader Richard Watanabe (吳偉臺) told a media briefing.
In developed nations, companies spend an average of eight hours to go through the process, which takes up to 27 hours in developing countries, Watanabe said.
Taiwanese authorities handle post-filings quite efficiently, as most applicants are export-oriented manufacturers that need smooth cash flows for capital equipment purchases and day-to-day operations, Watanabe said.
The study also looks at tax payments, time to comply and total tax rates in 190 economies globally, as part of the international body’s annual ease of doing business study.
The total tax rate in Taiwan has stayed unchanged at 34.5 percent this year, lower than the 36.27 percent benchmark in the Asia-Pacific region and 40.6 percent across the world, the report said.
The overall tax burden in Taiwan is heavier than Singapore’s 19.9 percent, Hong Kong’s 22.9 percent and South Korea’s 33.1 percent, but is much lighter than Japan’s 48.9 percent and China’s 68 percent, the report said.
The figures show that while taxes are an important factor, other considerations influence investment decisions by multinational corporations.
“Otherwise, tax havens like the Cayman Islands would be the world’s most attractive investment destination, while China, Japan and the US would scare away foreign investment given their heavy tax burden,” Watanabe said.
For global investors, tax policy predictability, transparency and consistency matter more than headline tax rates, PwC tax services partner Rosamund Fan (范書華) said.
The government must strike a balance between the nation’s economic development, social welfare and its fiscal health when approaching tax reforms, Fan said.
The Ministry of Finance plans to raise gift and inheritance tax rates by up to 10 percent to finance the nation’s long-term care system. The government is also seeking to overhaul the pension system for public servants, retired military personnel and school teachers in an effort to avoid a collapse of the system.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
In a patch of South America rich in lithium, used to make batteries for electric cars and other tech, Bolivia is lagging its neighbors in the race to mine the key metal. An area called the “lithium triangle” which spills over the borders of Bolivia, Chile and Argentina is home to 60 percent of the world’s lithium reserves, according to the US Geological Survey. Bolivia claims to have Earth’s largest deposit of the metal, used to make rechargeable batteries for smartphones, laptops and other devices besides e-vehicles. However, Bolivia has undertaken only four pilot projects and is running just one
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
RSS