Recent corporate tax reductions in some Asia-Pacific countries have reinforced the region's tax edge over the rest of the world, a study shows.
The tax cuts have helped to ensure an average tax rate in the region of 27.8 per cent as of July 1, according to a study by accounting firm KPMG Peat Marwick.
This compares with average rates of 37.73 per cent for countries in the Organisation for Economic Co-operation and Development (OECD), and 38.16 per cent in the European Union.
The average tax rate paid by companies in Asia-Pacific countries is on a par with the lowest tax paid in the OECD - a 28 per cent rate paid by entities operating in Sweden, Norway and Finland.
Five Asia-Pacific nations impose no corporate tax, while in 11 countries the highest rate of tax is below 20 per cent. In recent months, South Korea, Nepal, Singapore and Pakistan have cut tax rates.
The advantage held by many Asia-Pacific nations in comparison with OECD and EU counterparts is strengthened further by a generally low level of indirect tax, not included in the basic corporate tax statistics.
Hong Kong, Macau and Brunei are among Asian countries to resist the temptation to levy indirect taxes, although most Asian nations have started to introduce some forms of indirect tax.
