Reforms in East Asia and Pacific, 2008-09
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Brunei Darussalam
Brunei Darussalam reduced the corporate income tax rate from 30 percent to 25.5 percent in 2008, with an exemption on the first BND 100,000 of chargeable income for the first three consecutive years of assessment for newly incorporated companies. The corporate tax rate was then further reduced to 23.5 percent in 2009, while a 12 percent building tax was introduced on commercial buildings.
Areas of Reform: Paying taxes
Ranking in Doing Business 2010: 96
Cambodia
Cambodia introduced a social security contribution of 0.8 percent of the monthly average wage, with a cap of KHR 1 million (about $250).
Areas of Reform: Paying taxes (making it more difficult)
Ranking in Doing Business 2010: 145
China
China’s State Administration of Foreign Exchange relaxed trade credit restrictions in response to the economic and financial crisis. Foreign exchange authorization is no longer required.
Areas of Reform: Trading across borders
Ranking in Doing Business 2010: 89
Fiji
Fiji cut its corporate income tax rate from 31 percent to 29 percent. But the compliance time for taxes increased because of a requirement to prepare two pay as you earn (PAYE) employee certificates and PAYE annual summaries instead of the usual one. In addition, a road use levy has been imposed on all vehicles.
Areas of Reform: Paying taxes
Ranking in Doing Business 2010: 54
Hong Kong, China
Hong Kong, China, eased business start-up by simplifying registration and merging procedures. The economy also established a one-stop shop, allowing six local departments and two private utilities to function under the same roof to expedite the issuance of construction permits. Property registration has also become easier, because the stamp duty for the sale act can now be submitted online.
Areas of Reform: Starting a business, Dealing with construction permits, Registering property
Ranking in Doing Business 2010: 3
Indonesia
Indonesia eased incorporation and post-incorporation processes for new business registration by introducing online services, eliminating certain licenses, making the registry more efficient, and cutting company deed legalization fees, publication fees, registration fees, and business license fees. As a result, 2 procedures and 16 days were cut and the average company start-up cost was reduced by almost 52 percent of gross national income per capita. Property registration also became easier because time limits were introduced for standard procedures at the land registry. In addition, Indonesia increased investor protections by expanding disclosure requirements for related-party transactions.
Areas of Reform: Starting a business, Registering property, Protecting investors
Ranking in Doing Business 2010: 122
Kiribati
In Kiribati, no major reform was recorded.
Ranking in Doing Business 2010: 79
Lao People’s Democratic Republic
The Lao People’s Democratic Republic made it easier to pay taxes by consolidating three taxes—business turnover tax, excise tax, and personal income tax withholding—into one simpler form. It also improved the lodgment process and tax office staffing. The compliance time for paying taxes was reduced by 198 hours a year.
Areas of Reform: Paying taxes
Ranking in Doing Business 2010: 167
Malaysia
Malaysia eased business start-up with a new one-stop shop to streamline registration. In addition, the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) reduced company incorporation charges and corporate fees. The service is still new, and the government is planning a public awareness campaign about the new system. Enforcing contracts through the courts was made easier by increased staff and stricter deadlines that have shortened case filing times from 45 days to 30. In addition, the commercial court has been reorganized to dispose of interlocutory matters more swiftly.
Areas of Reform: Starting a business, Enforcing contracts
Ranking in Doing Business 2010: 23
Marshall Islands
In the Marshall Islands, no major reform was recorded.
Ranking in Doing Business 2010: 98
Federated States of Micronesia
In the Federated States of Micronesia, no major reform was recorded.
Ranking in Doing Business 2010: 128
Mongolia
In Mongolia, no major reform was recorded.
Ranking in Doing Business 2010: 60
Palau
In Palau, no major reform was recorded.
Ranking in Doing Business 2010: 97
Papua New Guinea
The specialized commercial track at the National Court of Papua New Guinea—introduced in 2007—has become fully operational, improving contract enforcement.
Areas of Reform: Enforcing contracts
Ranking in Doing Business 2010: 102
The Philippines
The Philippines enhanced access to credit with a new credit information act that regulates the operations and services of a credit information system. The government also cut the corporate income tax rate from 35 percent to 30 percent and promoted company reorganization procedures by introducing prepackaged reorganizations and regulating the receiver profession.
Areas of Reform: Getting credit (information), Paying taxes, Closing a business
Ranking in Doing Business 2010: 144
Samoa
Samoa eased business start-up by passing a new company act that removed the minimum capital requirement and simplified various other procedures. The act cut 26 days, 4 procedures, and three-quarters of the cost of starting a company. Samoa also enacted a new corporate law and a law introducing receivership, easing the process of closing a business.
Areas of Reform: Starting a business, Closing a business
Ranking in Doing Business 2010: 57
Singapore
Singapore simplified business start-up by making it possible to incorporate a company and register for taxes using the same online form. It also made it easier to deal with construction permits with new workplace safety and health regulations that allow low-risk industries to submit documents online. In addition, Singapore eased property registration by improving its computerized system.
Areas of Reform: Starting a business, Dealing with construction permits, Registering property
Ranking in Doing Business 2010: 1
Solomon Islands
In the Solomon Islands fee increases significantly raised the cost of obtaining a construction permit.
Areas of Reform: Dealing with construction permits (making it more difficult)
Ranking in Doing Business 2010: 104
Taiwan, China
Taiwan, China, eased business start-up by reducing the paid-in minimum capital requirement from TWD 1 million to 500,000 in 2008 and abolishing it altogether in April 2009; it also introduced time limits on various procedures. The government also made it easier to pay taxes by making both e-filing and e-payment applicable to value added tax (VAT).
Areas of Reform: Starting a business, Paying taxes
Ranking in Doing Business 2010: 46
Thailand
Thailand eased business start-up by merging the registration of memorandum and the application for company registration. As a result, it cut 1 procedure and 1 day from company start-up.
Areas of Reform: Starting a business
Ranking in Doing Business 2010: 12
Timor-Leste
Timor-Leste adopted a new tax law in July 2008. The law cut the profit tax rate from 30 percent to 10 percent and abolished the alternative minimum tax and the withholding tax on interest. Meanwhile, corporate income tax is now paid in quarterly installments when turnover is less than $1 million.
Areas of Reform: Paying taxes
Ranking in Doing Business 2010: 164
Tonga
Tonga adopted a new income tax act that allows for accelerated depreciation and amortization of intangibles and preliminary expenditures, and introduced self-assessment.
Areas of Reform: Paying taxes
Ranking in Doing Business 2010: 52
Vanuatu
Vanuatu created a geographically centralized, unified registry for collateral, strengthening access to credit and secured transactions. The registry is accessible online.
Areas of Reform: Getting credit (legal rights)
Ranking in Doing Business 2010: 59
Vietnam
Vietnam cut the corporate income tax rate from 28 percent to 25 percent and eliminated the surtax on income from the transfer of land. It also adopted a new enterprise income tax law and value added tax law. In addition, increasing competition in the logistics industry and the application of new customs administration procedures as part of the World Trade Organization (WTO) membership reform program have reduced trade delays.
Areas of Reform: Paying taxes, Trading across borders
Ranking in Doing Business 2010: 93