What are your thoughts on the Brunei government imposing personal income taxes on Bruneians?
Immediately, the first thoughts come to mind:
- The new regulation would require taxes to be paid by all unincorporated businesses.
- This includes all sole proprietorships and partnerships operating as business names.
- Taxes would probably start low 5%, then gradually ramp up. The opposite of that - starting taxes high, would discourage start ups but encourage established businesses to incorporate to avail themselves of the lower corporate rate of tax. I think they would not do this, but just impose a flat 5% of income tax on unincorporated businesses.
- Instant across-the-board rise in cost of living and doing business. Landlords operating as sole proprietorships would simply pass the increase in taxes on to their tenants.
- The first thing the public would ask is … what is the cost-benefit analysis of imposing this new regulation?
Some more analysis after the break.