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US tops KPMG’s first ever Green Tax Index

June 2013

The US heads the first KPMG Green Tax Index, which assesses 21 of the world’s largest economies for their use of tax as a tool to drive sustainable corporate behaviour and achieve corporate goals.


The index examines the role of tax in those countries in responding to global challenges, including energy security, waste disposal, recycling, pollution, climate change and the scarcity of water and other resources.
The US is placed first mainly because it offers so many federal tax incentives for energy efficiency, renewable power and green buildings.
However, it falls to 14th position in ranking for green tax penalties. KPMG says this is because its policy is weighted heavily in favour of incentives.


Japan takes second place overall, but it scores higher than the US on penalties, and it leads the rankings on tax measures to promote the manufacturing and use of green vehicles.


The UK is third with an approach balanced between incentives and penalties. It receives the highest rating for its carbon and climate change policies.


Fourth place is occupied by France, which is like Japan in concentrating more on penalties.


Fifth-place South Korea leans towards incentives, but it tops the league for green innovation. This, says KPMG, indicates South Korea generously backs green research and development through tax coding.


Despite the atmospheric pollution of Beijing, China is ranked sixth with a policy balanced between penalties and incentives. China’s emphasis is on green buildings and the efficiency of resources, including energy, water and materials.
KPMG reports that the only countries imposing fewer penalties than the US and Canada are emerging economies such as Brazil, 18th in the index, India (tenth), Mexico (20th) and Russia (21st).


The researchers point out that a high ranking does not mean a country is greener than others, only that the government uses its tax system more to influence company policies and achieve green objectives.  




KPMG | Global | Sustainability

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