Tax regime 'affects business competition'

News Article - Monday, December 17, 2007

filed under: Industry

Firms which believe their tax regime to be unattractive feel it is a hindrance to their competitiveness, it has been claimed.

Research by accountancy firm KPMG revealed that 70 per cent of European businesses which rate their country's tax regime as unattractive believe it puts them at a disadvantage when competing with foreign companies.

However, among those who rated their tax regime as attractive, 57 per cent did not think this gave them a competitive advantage over other companies in other countries.

Sue Bonney, head of tax for KPMG Europe, said: "Governments across the world have been using tax as a lever to encourage inward investment for many years but these results help to confirm that a benign tax regime is only part of the package which makes a business competitive."

Access to the market and raw materials alongside a high quality workforce are other important factors, she added.

In Mercer's Worldwide Individual Tax Comparator Report, the UK was ranked as having the 14th most attractive tax environment out of 32 nations. Ireland was ranked as number 18.

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