Tax Lessons from the Football (Soccer) World Cup - 4th July 2018

Being an avid soccer fan, I have been up regularly in recent weeks in the wee hours of the morning, sadly watching the Socceroos early exit from the competition. 

Looking down the list of the 32 competing nations, I started to ponder, as one does, the relative strengths and weaknesses of their various tax systems. That prompted me to have a closer look at the OECD Revenue Statistics to be found in a report released in May this year. This is a list of OECD countries ranked according to the competiveness of their respective tax systems. The rankings pre-date the most recent round of corporate and personal tax reforms proposed by the current Federal Government. 

To my surprise, sitting at the top of the least competitive tax systems for business were 7 of the 32 countries competing in the Soccer World cup, in order: France, Portugal, Australia, Mexico, Germany, Japan, and Belgium. This is in an overall list of 35 which also includes: South Korea (11th), Spain (15th), Sweden (21st), Denmark (22nd), Switzerland (24th), Iceland (26th), England (30th) and Poland (32nd). 

According to the report, the measure is taken by reference to a combination of both central and provincial government tax rates, inclusive of all relevant surcharges, and the listed rates are current as at 1 May 2018. 

The Federal Government claims that the package of measures which they have introduced, and are attempting to legislate, will move Australia from 3rd place to 15th. This would mean that the measures would have a significantly positive impact on the business environment.

I do not have the resources to investigate the veracity of these claims, but needless to say, the Opposition Labor party see things very differently. 

I don't necessarily see any correlation between a poor business environment and qualifying for the Soccer World Cup, but it did strike me as odd that the first 7 countries, in terms of the least competitive business environments, were all countries that had qualified to compete in Russia this year. 

Original article written by Bob Deutsch, Senior Tax Counsel for The Tax Institute of Australia 

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