The Macedonian Tendency: Let's Move to Macedonia - Lowest Taxes!

Wednesday, May 02, 2007

Let's Move to Macedonia - Lowest Taxes!

No stopping flat-tax juggernaut

"OTTAWA — In one of its first acts last year, the newly elected government of, Macedonia (population: two million) legislated radical tax reforms. On Jan. 1, 2007, the country introduced a flat-rate tax of 12 per cent on both personal and corporate income, matching the rate introduced two years ago by Georgia (population: 5.6 million). On Jan. 1, 2008, Macedonia will cut its rate to 10 per cent - and achieve one of the lowest tax rates in the world.

Macedonia's tax revenues will almost certainly rise. The country's new, young (age: 36 years) free-market Prime Minister, Nikola Gruevski, cites the phenomenon of voluntary compliance that accompanies flat-tax regimes. 'This reform will decrease tax evasion,' he says, 'and encourage people to meet their obligations to the state.' As Russia (population: 144 million) vividly demonstrated when it adopted a flat tax (replacing a 40-per-cent rate on personal income with a 13-per-cent rate) in 2000, low rates are persuasive tax collectors. Russia's revenues rose 25 per cent in the first year, 25 per cent in the second year, 15 per cent in the third year. People who violently resist getting scalped will submit voluntarily for a trim.

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