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How Zero Tax Countries Work?
Have you ever wondered how zero-tax countries manage to pay their costs and fund everything one country has to pay?
When people argue about not paying taxes, the opposite side will always say something like ‘’who will pay for our roads, schools, or hospitals?’’
Zero tax countries have roads, schools, and hospitals as well. But how do they pay for this?
In countries like Canada taxes are very high, but government spending is even higher! Taxes don’t even cover half of the cost of spending, and the country has a massive debt. Despite high taxes, it still has to borrow money in order to have things going. How crazy is that?
Now let’s break it down to basics. How does the country make revenue? Zero tax country doesn’t mean zero revenue – the country is profitable in some way, but they don’t have to fund things with their residents’ money.
On the other hand, it’s important to consider how they manage costs? These are both very important pieces of the no-tax puzzle.
Also, it’s important to note that when we say zero-tax countries, it usually means zero corporate and/or personal tax.
Lots of them will still have some other forms of taxes, such as stamp duty, property sale tax, and consumption tax or VAT.
Generally, the world seems to be moving in that direction – instead of paying taxes when you earn money you’ll pay when you spend it.
An extreme example of this is Singapore with car ownership – it’s extremely expensive to own a car in Singapore due to outrageously high vehicle taxes. In order to get a vehicle you’ll need to get a certificate of entitlement, and this will drive your car prices 4x of what it normally would be.
Toyota Prius will cost you about $120 000.
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Author: Michael Rosmer
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