BIZCHINA / Biz Life
China ranks 3rd on 'tax misery' list
By Li Fangchao (China Daily)
Updated: 2007-05-17 11:34
China ranks third among the world's most heavily taxed nations, according
to the latest "Tax Misery Index" chart released by Forbes.
"Forbes Tax Misery Index", reflects how much of your paycheck you will
take home after the government takes its cut.
China, with an index of 152, was eight points below last year's figure.
It was placed second last year.
France and Belgium lead the pack with 166.8 and 156.4 respectively on the
52-country list.
The United Arab Emirates stands at the bottom with a mere 18, which means
people take home almost every cent they earn.
China's Hong Kong Special Administrative Region ranks third from the
bottom.
"The index shows an executive's gross salary may be reduced by almost 60
percent if he has his office in Denmark or Sweden," Forbes said.
"By contrast, the index shows there's no reduction in the Middle East
nation of Qatar, where executives get to keep every euro, dollar or
drachma their company pays them," it added.
The misery score is the sum of corporate income, personal income and
wealth taxes plus employer social security, employee social security and
VAT/sales taxes at the highest marginal rate in each locale, Forbes said.
And the higher the index is, the more miserable it is.
Despite the decrease in the index this year, China remains the most
heavily taxed nation among Asian countries, the index showed.
And a report accompanying the list said that China has seen an obvious
improvement over last year, with 8 points down from last year's second
position.
Its taxation reform plan has achieved good progress and various factors
show that the ranking will continue to fall next year, the report said.
European countries and China have been at the top of the list since its
inception in 2000.
The magazine said it compiled the list for the reference of companies and
individuals to pick the place where they intend to work and live in a
global perspective.
An Tifu, a finance expert with the Renmin University of China, wrote in
an online column that it is "obviously exaggerated" to say China has the
third heaviest tax burden in the world, keeping abreast with other
developed countries with much higher income and a more complete social
security system.
An cast doubt on the way the statistics are compiled for the Forbes list.
"Different countries have different taxations and various ways of
calculation, to pick five or six indices cannot reflect the whole
picture," he said.
He also said that a series of measures China has taken to reform its
taxation system should not go unnoticed.
The country has doubled its threshold of personal income tax to 1,600
yuan ($208) and will unify its corporate tax rate for both domestic and
foreign companies at 25 percent.
(China Daily 05/17/2007 page3)
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