Indirect taxes are playing increasingly important role in Revenue gathering in many countries
“Competition between countries to attract and keep foreign investment is continuing to drive down corporate tax rates across the world. But initial indications suggest that governments are seeking to make up the shortfall in tax revenues by increasing indirect taxes, which may require companies to shoulder greater compliance and accounting standards” concludes KPMG's Corporate and Indirect Tax Rate Survey 2007.
The Survey also found that
++ indirect taxes appear to be playing an increasingly important role in the revenue-gathering strategies of many countries around the world.
++ This is a difficult policy for governments to follow because the link between higher indirect taxes and higher prices is obvious to anyone who buys goods and services, but the link between lower corporate tax rates and increased inward investment is less well understood.
++ This has major implications for companies, their tax strategies and their accounting systems.