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From an international perspective, Suriname has a low average VAT rate (10%), a high corporate tax rate (36%), and almost no dividend tax due to the small number of listed companies. Most EU countries have an average corporate tax rate of between 20% and 25%, a VAT rate of around 21%, and an average dividend tax of 30%.
Here are some of the main pros and cons, as well as possible measures to make up for lost revenue if corporate taxes are reduced.
Advantages of high corporate taxes:
1. Government Revenue: High corporate taxes can generate a lot of revenue from corporate profits. This is particularly important for Suriname, as other tax sources (such as dividend taxes) are not as important.
2. Limiting profits of foreign companies: High tax rates could discourage foreign companies from extracting profits from the country on a large scale.
Disadvantages of High Corporate Taxes:
1. Investment slowdown: High tax rates may discourage companies from investing in Suriname as the tax burden is higher than in many other countries.
2. Competitive Disadvantages: Suriname may become less attractive to foreign investors and companies than in countries with lower tax rates.
The benefits of lowering corporate taxes:
– Attracting investment: A reduction in corporate taxes could make Suriname more attractive for foreign investment and attract new companies.
– Improve competitive position: Suriname can become more internationally competitive, leading to economic growth and more jobs.
Measures to compensate for loss of income:
1. Expanding the tax base:
o Improve tax collection: Suriname can generate more revenue by improving tax collection and combating tax evasion.
o New taxes: The introduction of new taxes, such as dividend tax, environmental tax and WOZ-related taxes, can generate additional revenue.
2. Strengthening economic growth: By creating a better investment climate, businesses can grow and ultimately generate more profits, and overall tax revenues may be higher despite the lower tax rate.
3. Subsidy reform: Reducing inefficient subsidies or redirecting state spending toward productive investments could also help narrow the gap.
4.Increase in export-oriented industries: Investing in sectors that generate foreign exchange earnings, such as mining, agriculture and tourism, can boost economic growth and ultimately expand the tax base.
in conclusion:
Lowering corporate tax to 25% will make Suriname more economically attractive, but at the same time strategic measures must be taken to compensate for the revenue loss. Broadening the tax base and stimulating economic growth are some of the important measures that can be considered to keep a balance between taxation and economic development. Additional advantages: The more domestic and foreign investments, the more tax revenues there will be, and the higher the demand for labor, which will get higher and better wages according to international standards.
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