A new survey has found that Singapore and Hong Kong are the least complex, most consistent and most predictable economies in terms of tax policies in the region.
Accounting firm Deloitte said these are the findings of its inaugural Asia Pacific Tax Complexity Forecast.
It said Singapore and Hong Kong’s stable tax policies indicate that many firms continue to choose the two economies as their regional business centres.
In the category on complexity of tax policies in the coming years, Singapore was deemed the least complex followed by Hong Kong and Australia.
Singapore was again ranked first when it comes to consistency in tax enforcement practices ahead of Hong Kong and Australia.
As for the predictability of the tax environment, Singapore topped the ranking, above Australia and Hong Kong
In terms of priority focus for businesses, Singapore came in as the third most important market, behind China and India.
Deloitte notes that Singapore and Hong Kong’s taxpayer-favourable policies continue to attract certain industries, like financial services and other more mobile business functions and resources.
It said both economies operate under a one-tier tax system with only one level of tax authority with a relatively straight-forward tax system.
As such, Deloitte said businesses may find it easier to foresee and prepare for recurring tax compliance obligations.
It adeds that both economies act as a platform for many foreign investors to enter other Asia Pacific markets like China and India.
So while the tax systems may not be the predominant factor in companies’ strategies, such issues might still have an impact on firms’ business plans.
Over 1,000 respondents took part in the survey, which was conducted by Deloitte’s Asia Pacific International Core of Excellence (ICE).
The ICE was officially launched on Monday to provide international tax solutions to clients.
Source : Channel NewsAsia – 7 Jun 2010