Nowadays, there have been many large multinational companies that are operating over the world. However, the business environment is different across different regions. One of the most important factors is the difference in the tax systems that different countries do not have same tax rates; therefore, despite the differences in the capital market and labour market prices, the tax rates could significantly determine how much profit they can receive from their revenues. Multinational companies are able to pay fewer taxes than small and medium companies in terms of proportions, especially in those countries with high corporate tax rates. This is because multinational companies have very professional tax sufficient teams that enable them to transfer profits to those countries with extremely low tax rates.
Therefore, apart from those companies which are founded and grow inside the countries, the governments are hardly collecting revenues from those foreign multinational companies. The current global tax environment is kindly exploiting small and medium companies and giving away huge benefits to those large companies. Such environment encourages those small and medium companies with huge potentials to keep growing to become mutlinational companies. On the other hand, the disagreement between countries will make the current global tax system unlikely to change over the coming year.
Therefore, it seems that the unglobalised taxi system is a drive to encourage companies to grow the become mutlinational companies and contribute to the globalisation.
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