To encourage local and foreign investment in Bangladesh, Bangladeshi business leaders have emphasized the need for tax reforms on June 8, 2021, during a virtual post-budget dialogue hosted by the Chamber of Commerce and Industry (CCI). However, there are many countries who have very low or no income taxes. Here is a list of countries who announced 0-Tax or Tax-friendly & their success.
Panama
Panama is regarded as a true ‘tax haven,’ with a flexible legal system and tax-friendly legislation. As a result, individuals and offshore companies are not subject to income taxes. In addition, offshore companies that conduct business outside the country are exempt from personal and corporate income taxes. Offshore companies doing business in the United States, on the other hand, will be subject to little local taxes.
Success:
Panama is a prosperous country. The enlarged Canal is a vital hub for world trade and may expand again in the future. Since the restoration of democracy, the economy has grown at an annual rate of over 6%. It has the fastest-growing GDP and rising real estate and financial services industries. Stability in the economy and politics attracts talent from all over the world.
United Arab Emirates
The UAE is wealthy in natural oil resources, and its free trade zones are open to foreign ownership and have no taxes, making it a popular investment destination. Individuals in the UAE pay no income taxes, allowing them to earn tax-free wages. Only foreign banks and oil firms pay corporate taxes, while the rest of the economy is tax-free. Excise duty is applied on a small number of goods and services, whereas VAT is imposed on the bulk of commodities starting in 2018. Under the Double Taxation Agreements (DTA), the UAE also allows all public and commercial firms and other companies operating in the country to avoid double taxation on investments abroad.
Success:
After deducting taxes, the UAE is the 5th largest economy in the Middle East, with a GDP of US$421 billion in 2020. Besides, tourism is one of the UAE’s most important revenue sources.
Qatar
People in Qatar are exempt from paying taxes on their earnings. On the other hand, commercial activity is subject to corporation taxation, which amounts to 10% of the business’s total state income and must be paid annually. Rental income is also subject to a 10% fixed tax rate. However, the country’s tax-free atmosphere and modern infrastructure attract many expatriates.
Success:
The lowest tax rates encouraged investment, strengthened the state’s financial soundness, diversified its revenue sources, improved its financial situation while creating a safe and appealing investment climate. As a result, the company’s net profit for 2021 increased to 13.2 billion riyals ($3.6 billion) than the previous year.
Kuwait
Residents in Kuwait are entitled to tax-free personal income. It effectively indicates the concept of resident and non-resident, not defined in Kuwaiti tax legislation. However, foreign corporations in the country are subject to a corporate tax. These international corporations must pay the Kuwaiti Government 15% of their profits.
Success:
Lowering taxes increases disposable income, allowing consumers to spend more money, increasing Gross National Product (GNP).
Oman
The tax rules in this country are business-friendly. Oman reduced income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors. This tax-free legislation covers wealth, capital gains, and real estate. Taxes on taxable income are collected at 15% for businesses and corporations. Companies engaged in petroleum operations, on the other hand, must pay a surcharge of 55%.
Success:
The country is economically developing and increasing the employment rate. Moreover, many residents are encouraged to start their business; also, most migrants are moving to Oman to start their business. Hence, the country has become one of the top business-friendly countries globally.
