South Korea’s tax competitiveness ranks 26th in the world (report)

South Korea’s international tax competitiveness has fallen nine notches in the past five years, according to a report Thursday, stressing the need to cut tax rates and simplify its tax system.

The country’s tax competitiveness ranks 26th globally in 2021, up from 17th five years earlier, according to the Korea Economic Research Institute (KERI) report.

This is the largest decline among the Group of Five major economies, as well as 37 members of the Organization for Economic Co-operation and Development.

The United States saw its tax competitiveness gain seven notches, from 28th to 21st over the period cited, that of France from 37th to 35th.

On the other hand, the ranking of Japan fell from 19th to 24th and Germany saw its competitiveness drop a notch to 16th.

Tax competitiveness measures the extent to which a country’s tax code is appropriate for improving productivity, investment and economic well-being. Rankings are based on a Global Tax Competitiveness Report compiled by the US Tax Foundation.

According to the report, South Korea ranks 33rd in corporate taxes, down seven places from five years earlier.

KERI, the research arm of the South Korean conglomerate lobby, attributed the drop in the corporate tax rate to 25%, from 22% in 2018.

In terms of income tax, South Korea’s ranking fell from 17th to 24th, with its competitiveness in property tax falling from 31st to 32nd, according to the report. (Yonhap)