An international survey by KPMG suggests that a more mobile global workforce is bargain hunting for a better deal from governments.
“Top rate personal income tax rates around the world have fallen by an average of 2.5 percent in the past six years, as governments strive to balance their need for revenue with the impact of increasing global labor mobility, a new study from KPMG International has found.”
And the effect on income tax appears to be encouraging even if modest.
Of the 87 countries surveyed, 33 have cut their rates in the past six years and only seven have a higher top rate in 2008 than they did in 2003.
However Australia might still need to lift it’s game.
“Australia also cut its personal tax rate by two points to 45 percent last year,” said Rosheen Garnon, head of KPMG’s International Executive Services practice and a partner in the Australian firm, “but if the intention was to attract back high value Australian workers who have temporarily moved to Hong Kong or Singapore, it may not be enough. It is common to hear from foreign workers that once families have become accustomed to the huge increase in spending and saving power that low tax rates provide, it can be very difficult to justify going home.”