The World Bank has published its latest “Doing Business” report — an annual fiasco that might easily be interpreted as a celebration of the neoliberal cause of attacking government.
The ranking for this year is:
1 Singapore
2 Hong Kong SAR, China
3 New Zealand
4 United Kingdom
5 United States
6 Denmark
7 Canada
8 Norway
9 Ireland
10 Australia
Four of the top five happen to coincide the the ranking of the world’s major financial centres, noted for their light approach to regulation. No chance of coincidence then? Each bar New Zealand, is, of course, a secrecy jurisdiction.
As for ease of paying tax — this is the ranking:
1 Maldives
2 Qatar
3 Hong Kong SAR,
4 Singapore
5 United Arab Emirates
6 Saudi Arabia
7 Ireland
8 Oman
9 Kuwait
10 Canada
I am sure Ireland is delighted to find it’s so easy to do business there, and so easy not to pay tax, just when they need every penny they can lay their hands on.
And, as ever, the stats on which this is based are absurd. Talk of adding up apples and oranges. Adding up profit, labour and sales tax percentage rates and suggesting the result is meaningful is ludicrous.
Shame on them for producing such nonsense.
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Actually the ranking matches our observations about creation of companies which we do worldwide.
Due to the favourable tax treatments of Singapore and Hong Kong these are the places where preferred set-up and investment is occurring. New Zealand is a less well-known territory but increasingly being watched. Both Singapore and HK have the advantages of being low-tax areas.
The United Kingdom was most favourable a few years ago, but is becoming increasingly unpopular and used as a trading entity area with complex financing deals to repatriate profits offshore and increasing employee rights and threats to higher taxation are worrying investors about the future position in the UK. (Whilst we love this as it keeps us busy, our long-term view is that this is bad for the UK and our growth is being focussed overseas to match our client needs). The United States is rapidly taking over from the UK in popularity for ease of business. Ireland is interesting – it has benefitted from the low corporation tax regime, but if this rises then Ireland’s popularity will evaporate.
If you look at the longer-term trends, HK, Singapore, and Canada being light regulation and light tax (and Ireland if the current financial concerns can be overcome) will continue to be successful.
@Nick Lockett
Respectfully, what a lot of nonsense
Relatively little investment takes place in HK or Singapore
It takes place in Asia and China
You are, of course, dependent on labour to make a return – there is no other way to do so
What you are seeking to do is to deny labour a share in that return
How sick you are to say increasing employee rights frighten off investment. No doubt you also demand a highly qualified labour force3, that infrastructure and state subsidies be provided to meet your needs and that the full force of law be available to protect your property rights
And you do not ant to pay for any of these things
Three words describe your attitude: arrogant, exploitative abuse
No one can ever accuse you of being less than blunt with your responses to posts, Richard. 😉
I’m assuming from how I read Nick Lockett’s post that what he’s saying is based on some form of research. In which case what I was most concerned about – and this is where I link into the point you make about labour – is that as with so much research nowadays it seldom drills down to analyse the underlying causal relations, and thus what the tendencies might be in terms of longer run trends/outcomes.
Unfortunately ‘quick and dirty’ research of this type is nearly endemic nowadays, but then again, it fits with sound-bite news reporting and feeds the desire of many to believe that social and economic relations, and the world in general, is a lot less complex system than it actually is.
The Germans must be crying into their pilsens wondering where it all went wrong.
All this World Bank table shows is the countries that are doing the most to promote global financial instability, the collapse of public services and beggar-my-neighbour ‘race to the bottom’ tax competition. So it is useful but not in the way the World Bank thinks it is. It’s more a “name and shame” than a badge of honour.
Richard,
New Zealand has become a major offshore center for non-residents, excluding Australians. Its a serious supplier of offshore type discretionary trusts. Plus there is no tax (or at least only a minuscule 2%) on non-residents if they elect not to get a tax certificate. They also supply agency type companies which allow one to skim away profits without question to a tax haven.
@Mark
Absolutely. Agreed. It’s weird that such a place can become so pernicious.
@paul
🙂
@Howard
Indeed
it’s odd that this looks like the inverse of the financial secrecy index produced by the tax justice network. Perhaps that is, almost inevitable.