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The Highest Corporation Taxes Around the World and the Main Drivers Behind them

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Taxes Pay by Corporation Around the World and the Main Drivers Behind them

While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.

The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.

On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?

OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.

South America has most countries in highest corporation tax top 10

According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.

It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.

Africa: the continent with the highest average corporation tax

Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?

South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?

Country Continent Tax (%)
Puerto Rico North America 37.5
Zambia Africa 35
Brazil South America 34
Venezuela South America 34
France Europe 33.3
Columbia South America 33
Morocco Africa 31
Japan Asia Pacific 30.62
Mexico North America 30
Argentina South America 30
Germany Europe 30
Australia Asia Pacific 30
Philippines Asia Pacific 30
Kenya Africa 30
Nigeria Africa 30
Congo Africa 30
Belgium Europe 29
Pakistan Asia Pacific 29
Sri Lanka Asia Pacific 28
New Zealand Asia Pacific 28
South Africa Africa 28
Luxembourg Europe 27.08
Chile South America 27
Canada North America 26.5
Algeria Africa 26
India Asia Pacific 25.17
Jamaica North America 25
Chile South America 25
Ecuador South America 25
Netherlands Europe 25
Spain Europe 25
Austria Europe 25
South Korea Asia Pacific 25
Bangladesh Asia Pacific 25
China Asia Pacific 25
Indonesia Asia Pacific 25
Zimbabwe Africa 25
Tunisia Africa 25
Greece Europe 24
Italy Europe 24
Malaysia Asia Pacific 24
Israel Middle East 23
Egypt Africa 22.5
Norway Europe 22
Denmark Europe 22
Turkey Europe 22
Sweden Europe 21.4
United States North America 21
Portugal Europe 21
Russia Europe 20
Finland Europe 20
Iceland Europe 20
Afghanistan Asia Pacific 20
Azerbaijan Asia Pacific 20
Kazakhstan Asia Pacific 20
Thailand Asia Pacific 20
Vietnam Asia Pacific 20
Cambodia Asia Pacific 20
Taiwan Asia Pacific 20
Saudi Arabia Middle East 20
Jordan Middle East 20
Yemen Middle East 20
Madagascar Africa 20
Libya Africa 20
Slovenia Europe 19
Czech Republic Europe 19
Poland Europe 19
United Kingdom Europe 19
Belarus Europe 18
Croatia Europe 18
Switzerland Europe 18
Ukraine Europe 18
Singapore Asia Pacific 17
Hong Kong Asia Pacific 16.5
Lithuania Europe 15
Georgia Asia Pacific 15
Maldives Asia Pacific 15
Kuwait Middle East 15
Iraq Middle East 15
Ireland Europe 12.5
Cyprus Europe 12.5
Bulgaria Europe 10
Qatar Middle East 10
Hungary Europe 9
Barbados North America 5.5

 

Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Ecobank Group Appoints Jubril Mobolaji Lawal as Regional Executive and Managing Director Designate for Ecobank Nigeria

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Jubril Mobolaji Lawal

Ecobank Group, the leading pan-African banking group, announces that Jubril Mobolaji Lawal has been appointed as Regional Executive and Managing Director designate of Ecobank Nigeria, subject to the approval of the Central Bank of Nigeria.

The appointment is made ahead of Patrick Akinwuntan’s upcoming retirement, due to him reaching retirement age in January 2022.

Mobolaji Lawal joins Ecobank having been a versatile senior banking executive and digital transformation specialist for over 28 years with Guaranty Trust Bank Plc. He has deep involvement and experience in digital and retail banking, corporate and commercial banking, credit risk management and corporate finance. His previous experience includes being Executive Director at GTBank Plc Nigeria, and Non-Executive Director roles at both GTBank Ghana Limited and Nigeria Interbank Settlement Systems Plc. Mobolaji led the team that envisioned and implemented GTBank Plc’s retail and digital banking strategy to achieve industry-wide leadership over a ten-year period and he introduced new products and solutions that have helped to deepen payments and access to digital financial services in Nigeria.

Mobolaji was selected and appointed as Managing Director designate following a keenly contested selection process, which included both internal and external candidates.

Mobolaji Lawal holds a Bachelor of Law degree from the Obafemi Awolowo University, Nigeria; B.L. from the Nigerian Law School and a Master of Business Administration from Oxford University, United Kingdom. He has also attended several executive management and banking specific developmental programmes at leading educational institutions including Harvard Business School, Stanford Graduate School of Business and Institut Européen d’Administration des Affaires (INSEAD).

Commenting on the appointment, Ade Ayeyemi, CEO, Ecobank Group said: “We welcome Mobolaji Lawal to the Ecobank Group and we stand to benefit from the extensive experience that he has acquired in various fields across banking, which will play a major role in continuing to rebuild our franchise in Nigeria. Nigeria is a key market for us, in which we have seen significant improvement over the past three years as we reposition and leverage upon our pan-African strengths in digital products and services, payments and as the go-to-bank for businesses seeking to grasp the growth opportunities being created by the AfCFTA, across all our markets on the continent. I wish Mobolaji the best and assure him of both my support and that of the entire Ecobank Group.”

Mrs. Bola Adesola, the Chairman of the Board of Ecobank Nigeria said: “We look forward to working with Mobolaji and assure him of the full support of the Board, Management and all the staff of Ecobank Nigeria. The business in Nigeria is on the path of transformation and we are confident that Mobolaji will have significant impact in advancing our positive trajectory.”

Mobolaji Lawal will assume the position of Managing Director, Ecobank Nigeria, upon receiving the approval of the Central Bank of Nigeria and after Patrick Akinwuntan retires.

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South Africa Encourages Nigerian Businesses to Expand to the Country

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In an effort to improve trade relations between Nigeria and South Africa, the South African High Commissioner to Nigeria Thamsanqa Dennis Mseleku has implored more Nigerian businesses (especially financial institutions) to expand their businesses to South Africa.

The South African representative revealed that the South African consulate was currently working on issuing Nigerian business owners (or operators) visas valid for ten years, in order to further bolster business relationship between both countries.

This was mentioned by Mseleku yesterday on ‘The Morning Show’, a programme which is monitored closely by Arise news, on which he also noted that the bilateral agreements being signed by both countries would be fully executed in the coming years.

According to Mseleku, Nigerian businesses are operating in South Africa, with the issue being raised back in 2019 when President Buhari was present in South Africa specifically talking about Access Bank and Air Peace. Mseleku stated that Access Bank has since opened up a branch in South Africa, and Air Peace is now making flights to and from South Africa.

Mseleku then said,”So, the issue is that we must encourage more businesses that want to go to South Africa from Nigeria to do so particularly in the financial sector.”

This prospective deal between both countries is promising, because the encouragement of Nigerian businesses to come into South Africa may eventually lead to more South African businesses coming into Nigeria to operate. The moves will undoubtedly boost the economies of both countries.

It may also encourage other African countries to engage in trades and have bilateral or multilateral agreements with other African countries, boosting economies across the entire continent.

Mseleku also noted that some South African countries were pulling out of Nigeria, which he cited as one of the reasons for the visit of the South African President.

He also addressed the inaccessibility of visa to business personnel, saying that the country is agreeing and would go on implementing longer term visas for them. He then mentioned the 10 years visa which the country is considering.

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All Business Stakeholders Will Benefit from Stronger ESG Policies, Says GlobalData

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The age-old view that addressing environmental, social and governance (ESG) issues will make a dent in profits is a myth, says GlobalData. The leading data and analytics company notes that businesses that embrace all three elements of ESG will actually outperform their peers.

Cyrus Mewawalla, Head of Thematic Research at GlobalData, comments: “The reluctance of many CEOs to fully engage with sustainability can be attributed to the age-old view that it will hurt profits. However, GlobalData’s research suggests the opposite: CEOs that are too slow to improve their company’s approach to ESG will see an exodus of customers and a drop in profits far sooner than they ever imagined.”

GlobalData’s latest thematic report, ‘Thematic Research: ESG – Top Trends by Sector‘, notes that, while saving the planet used to just equate to implementing sustainable practices such as ‘limiting the use of plastics’ and ‘reducing carbon footprint’, ‘sustainability’ has morphed into an umbrella term that includes all aspects of ESG issues. The company proposes an ESG framework that identifies key areas in which companies should invest. One of these is climate change.

Luke Gowland, Analyst in the Thematic team at GlobalData, comments: “With COP26 setting the agenda on climate change, companies are focusing their efforts on tackling carbon emissions by switching to renewable energy and undertaking energy efficiency projets. However, companies must excel across all three aspects of ESG, and not overlook the importance of strong social performance and having the correct governance structures in place to achieve ESG goals.”

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Citizens, governments, regulators, and the media are turning the spotlight on corporations and demanding action. Social inequality, corruption, tax avoidance, and a lack of action on climate change are all issues that companies must now address head-on, in full public view.

Since Q1 2021,GlobalData has been asking respondents to detail their company’s approach to ESG goals In Thematic Sentiment Analysis, Q3 2021, conducted in Q3 2021, nearly a quarter of respondents thought that, for most companies, ESG was just a marketing exercise.

Gowland continues: “Our latest sentiment analysis report shows that more companies have changed their behavior to meet ESG goals (33%) than not (22%). While the attitudes towards ESG are improving, there is a long way to go.”

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