Global tax receipts fall by nearly half a trillion dollars during pandemic...



Tax receipts from around the world have fallen by nearly $500bn in real terms to $11.7tn during the Covid-19 pandemic, down from $12.1tn the year before*, which may force Governments to make unprecedented tax increases to make up for losses, reveals a new study of tax revenues worldwide by UHY, the international accountancy network.


UHY’s study shows 26 out of 30 countries suffered from a hit to tax revenues. Some of the biggest decreases include the UK which saw tax revenues fall 11%* to $728bn and Russia which also fell 11%* to $295bn (see table below).


UHY says the fall in tax revenues is due to the Covid-19 pandemic, as governments cut taxes for individuals and businesses in an effort to boost their economies. In addition, tax revenues were hit by a fall in tax on corporate profits and a reduction in transactions that are subject to tax (e.g. VAT on purchases and tax on property transactions).


At the same time, governments introduced Covid support schemes such as covering employees’ wages to help those who were impacted by the pandemic. Although these schemes have helped to boost national economies, the additional costs have impacted public purses significantly. As a result, tax increases will be required in many countries to make up for major deficits.


Some countries have already begun implementing tax increases, such as the UK, which recently increased National Insurance contributions, generating an extra £17bn per year. The Spanish government introduced tax increases in the midst of the pandemic, with the income tax rate on income above EUR 300,000 increasing from 45% to 47%. Spain’s VAT rate on alcohol also increased from 10% to 21% earlier this year.


The US is currently undergoing discussions about imposing increases to corporation tax and rates of income and capital gains tax for the wealthiest households to raise revenues.


Subarna Banerjee, Chairman of UHY International, comments: “The enormous impact of the pandemic on tax revenues has been felt worldwide.”


“Many governments have been put in difficult positions, having to provide support to those who have been hit hard by Covid-19 while trying to prevent revenues from falling too far. Unfortunately, there will come a time where they need to balance the books and some governments may look to use tax increases to do so.”


“However, governments need to be cautious about any dramatic plans to increase their tax revenues. Sudden, large tax increases will place huge amounts of pressure on taxpayers, many of whom are also still getting back on their feet.”


Tax revenues of major economies take a hit during Covid


Germany’s tax revenues fell 8%* to $837bn in 2020. During the pandemic the German government introduced a number of tax reliefs in the hope of boosting the economy. The standard rate of VAT in Germany was reduced from 19% to 16% last year. Businesses in the catering sector, arguably one of the sectors that suffered the most from Covid-19, benefited from an even bigger reduction in VAT from 19% to 7% on food sales.


Another major economy that suffered from a fall in tax revenues was China, falling 5%* to $2.2tn last year. China recognised the impact of the pandemic on smaller enterprises and as a result, introduced a number of tax reliefs focused on supporting these businesses. An example is the significant reduction in Corporate Income Tax, which for small and micro enterprises with a tax income below RMB 1 million, was reduced from 25% to 5% last year. In 2021, it was announced this rate would be cut even further to 2.5%.



Global tax receipts fall 4% during pandemic – costing nearly $500bn in real terms to public finances


Notes for Editors


UHY global press contact:

Leigh Lyons on +44 20 7767 2624

Email: –

Nick Mattison or Richard Crossan

Mattison Public Relations

+44 20 7645 3631

+44 74 4637 5555








By Rhys Madoc, CEO, UHY International

November 2021

One of the signs that a relationship may be breaking down, is when dialogue stops and as a consequence regular communication and engagement is disrupted.

Both personal and professional relationships are similar, in that mutual trust and understanding are crucial, and both are prone to leach away over time unless the parties involved actively work to maintain them.

Cementing relationships

In accountancy, for example, there is always a risk that a relationship may drift. At the start of a contract, dialogue is regular and frequent, as the scope of work is agreed, benchmarks are set and timelines negotiated. In this honeymoon period, regular communication is a priority for everyone concerned.

As the relationship matures, that urgency can fade. The work becomes routine. As long as the tasks remain the same and are carried out satisfactorily, it is easy to believe that nobody feels the need for that random, off-diary chat. In client relationships spontaneity can start to feel like an unnecessary use of valuable time.

At UHY, I believe our member firms work hard to resist this tendency towards drift – indeed, I frequently hear how our longstanding clients value their ongoing relationships with our member firm professionals. If the last couple of years have taught us anything, it is that nothing cements relationships like regular dialogue. During the pandemic, UHY member firms around the world reported a range of positive outcomes for clients from unprompted, off-diary contact.

Talk is cheap – and valuable

To be clear, these are not sales calls or scheduled quarterly meetings. They might involve nothing more than a quick call to ask how the client is coping, or an unprompted email pointing them to a new source of Covid-related advice. Clients are appreciative of this attention, and often initiate these contacts themselves, if only because they are grateful for the opportunity to talk to someone who listens and understands.

What the pandemic shows us is the obvious – but sometimes underappreciated – value of honest and spontaneous dialogue. To me, this is too important to let disappear with the pandemic. When provider and client talk regularly, freely and without the time and subject matter constraints of a scheduled meeting, good things invariably happen.

At the very least, you build mutual trust. Talking through current challenges together reconfirms your relevance. Clients get to better understand your business and the value of service and expertise at their disposal. You show that you understand their world, and can keep them abreast of developments that might impact or benefit their business.

Dialogue is never wasted

Dialogue is a two-way street, and these occasions give both parties the opportunity to listen. Developing keen listening skills is important. By listening, we may each discover opportunities to add more value to the relationship.

Dialogue is never wasted. Open, honest conversations encourage clients, for example, to tell you what they need (beyond the basic stipulations of your contract), what they really value in your relationship, and the best way you can deliver your services.

Our member firms in the UHY network strive to achieve this kind of partnership in every engagement, to be the kind of professional provider a client can confide in, turn to for advice, solicit a recommendation from and look to when they want to be challenged or inspired. Ambitious businesses have always benefited from professional service experts who offer ideas and insight as well as competent technical skills. In short, they want trusted advisors.

Creating closeness

Both clients and advisors can make it easier for dialogue to flow. For example, swapping direct contact details, rather than generic ones. If you are located in the same city, it might mean meeting for a coffee every now and then. Or setting up a chat or instant message group, so either party can fire off a quick question by text when picking up the phone is not an option.

In my experience, clients also appreciate the sharing of relevant economic and industry news and the chance to discuss any implications for them specifically. And for accountants today, social media can be a great way to stay front and centre of your clients’ thoughts. Blogs, publications and newsletters all help.

Dialogue enables empathy and responsiveness to client needs. It provides a platform to offer value beyond tax or audit expertise. And it opens up the path to becoming a trusted advisor.

Umbrella photo by Redd on Unsplash

Calling photo by on Unsplash

Coffee shop photo by Toa Heftiba on Unsplash






By Rhys Madoc, CEO, UHY International

October 2021

Environmental, Social and Governance is taking over from Corporate Social Responsibility (CSR) as a way for businesses to demonstrate a measurable commitment to sustainability.

ESG covers environmental impact, company culture and leadership, and takes into account factors like diversity, inclusion and board composition, as well as more familiar green and philanthropic measures.

Pressure for more responsible business is being applied by consumers, regulators and investors. ESG is an acknowledgement that sustainability in particular, is evolving from a voluntary ambition to something that increasingly feels like a requirement. Compared to CSR, ESG provides measurability.

Which is exactly where accountants come in, of course. We prove that businesses are what they say they are. We use professional expertise and experience to interrogate the evidence and come to firm, factual conclusions. We have a huge role to play in ESG reporting.

ESG reporting is inconsistent

More fundamentally, we have a role to play in deciding what ESG reporting actually involves. ESG is in its infancy, and reporting standards and frameworks are still inconsistent, which can create confusion for companies, consumers, investors – and accountants.

Paul Polman, the former CEO of Unilever, recently wrote in the Harvard Business Review that “investors are increasingly asking companies to report on their sustainability performance. Having a set of standards will greatly improve this dialogue and enable both to better understand the relationship between sustainability and financial performance”.

Accountants are already part of the development of these standards. Bodies like the International Federation of Accountants (IFAC) and International Accounting Standards Board (IASB) are pushing for the creation of consistent global criteria against which ESG claims can be judged.

Accountants are reporting specialists

Accountants are experts at setting and adhering to standards, and are trusted by corporations, investors and regulators to provide reliable information. New frameworks and standards that marry financial and non-financial reporting – showing the effect of each on the other – will cement accountancy’s position at the heart of the ESG reporting process.

Global standards for ESG will help business to develop and prove responsible practices. With that in mind, accountancy firms big and small are able to take steps today to develop the skills and specialisms required to offer non-financial auditing and reporting services to business clients.

The opportunities are clearly there for those who do. Why wouldn’t a business trust its ESG reporting to the firm that expertly completes its financial audit every year? Accountants are the right people for the job.

Clients want ESG advice and expertise

Certainly, clients want us on board as they navigate new ESG reporting standards, and we have written about this in the latest issue of UHY Global, our business magazine. In the feature The Colour of Money is Green, Joyce Bruce, sustainability and CSR manager at UHY Fay & Co, UHY’s member firm in Spain, says companies are increasingly seeking her services because of regulatory pressure to provide non-financial reports.

There is a wider perspective too. According to Datuk Alvin Tee, group managing partner of UHY’s member firm in Malaysia, “there are changing expectations of the role business plays in improving society and protecting the environment”.

That requirement is filtering through the business world, so we see for example how large firms are demanding that smaller companies prove their own environmental credentials as part of a sustainable supply chain.

Investors are also pushing for consistent, reliable ESG information, as more evidence points to sustainable businesses providing better returns in the long term. In fact, Black Rock – the world’s largest asset manager – published an ESG Integration Statement in May this year outlining the company’s ‘firm-wide commitment to integrate ESG information into our investment processes’. Research shows that three quarters of institutional investors now consider ESG factors an integral part of sound investing.


As the clock ticks down towards national and global environmental deadlines, it is fair to assume the demand for ESG reporting will grow. Experts also predict that, in the near future, other business measures such as executive remuneration could also be tied to ESG metrics alongside financial performance.

If our profession acts now, accountants will be well placed to meet the environmental, social and governance reporting needs of our clients as ESG becomes established.

Green images courtesy of UHY Global magazine issue 12 ©UHY International


NZZ is a Swiss media conglomerate that publishes Neue Zürcher Zeitung, a German language newspaper often considered Switzerland’s paper of record. Neue Zürcher Zeitung, founded in 1780, is something of a Swiss institution and is one of the oldest newspapers in the world that is still published.


One benefi ciary was iPower, a hydroponics and gardening product supplier based outside Los Angeles, California. iPower supplies nutrients, growing mediums, hydroponic equipment, power-effi cient lighting and more, selling through its website and third party
e-commerce channels like Amazon, eBay and Walmart. The business sources products from popular brands and has also established in-house branded products, marketed under the iPower and Simple Deluxe labels.

Read more.

Germany powers ahead in electric car sales growth – sales more than treble during pandemic...



Germany has seen the world’s fastest growth in electric car sales of all major economies * during the pandemic, with sales more than trebling to 194,000 cars in 2020, up from just 63,000 in 2019, shows a study of electric car sales worldwide by UHY, the international accountancy network.


The 207% growth in electric car sales in Germany last year puts it first out of 26 countries** in UHY’s study. This was marginally ahead of Italy, which saw a rise of 204%, from 11,000 units sold in 2019 to 32,000 in 2020. The UK was in third place, with a sales increase of 186% in 2020. Average sales growth of EVs globally in 2020 was 31%.


Worldwide growth in sales of electric cars has outpaced global car sales (including petrol and diesel) which fell by approximately 15% to 64 million in 2020, down from 75 million in 2019***.


Less than a fifth (19%) of countries in UHY’s study saw sales of electric cars fall during the first year of lockdown.


UHY says that Germany has begun a programme of heavy investment in electric vehicle charging infrastructure in order to achieve its target of having 10 million electric vehicles and one million charging stations on German roads by 2030. The country also has generous tax breaks and incentives for purchases of electric cars and charging points. New electric cars priced at less than 40,000EUR benefit from a Government rebate of 9,000EUR, while the state-owned development bank offers a 900EUR grant for the installation of a private electric car charging point.


UHY Wahlen & Partner, says that the launch of several new and updated mass-market electric vehicles in the last year, including the Volkswagen ID.3 and e-Up! has triggered a new wave of sales in Germany. Battery electric cars made up 10% of all new cars sold in Germany in 2020, with fossil fuel-powered cars falling to a 78% share of new car sales.


Dennis Petri, Chair of UHY, comments: “The electric car revolution has picked up a lot of speed worldwide in the past year, despite the effects of the pandemic. Germany is a country with a long history of automotive innovation and it looks like it will again be part of the vanguard in making electric cars a part of everyday life.”


“Many governments around the world have helped to drive the electric vehicle transition through providing subsidies for consumers who purchase EVs. Along with investing in the public charging infrastructure necessary to support electric cars, this is the biggest step governments can take to accelerate a large-scale switch to EVs.”


Thomas Wahlen, Managing Partner at UHY Wahlen & Partner, comments: “Manufacturers and the Government in Germany have both invested a great deal in accelerating the German transition to electric vehicles and they will be hoping this growth rate continues for several more years.”


Electric car sales growth continues to slow in China


UHY’s study shows that electric car sales growth in China continued to slow in the past year, with 968,000 battery electric cars sold in 2020, a 16% increase on 836,000 sold in 2019. The growth rates in the previous two years had been 23% and 54%. China’s sales growth in 2020 placed it 20th in the table in UHY’s study.


However, China remains by some distance the largest national market in the world for electric cars, with more sales than the next four largest markets combined. Sales of electric cars in China are heavily incentivised by programmes including Beijing’s ‘licence lottery’, which limits the city’s 22 million residents to only 40,000 new petrol cars per year to lower congestion and pollution.


US and Japan both saw electric car sales fall in 2020


UHY’s study also shows that both the US (22ndplace, electric car sales down 5% in 2020) and Japan (26th place, electric car sales down 31% in 2020) both saw electric car sales fall in the past year. Less than 2% of new cars sold in the US in 2020 were battery electric vehicles.


Dennis Petri adds: “Electric cars in the US are still generally confined to the east and west coasts – that’s thanks to the incentives offered by state governments in places like California, New York and New Jersey. Car buyers in the rest of the country would benefit from more states following suit.”


Morito Saito, Director at UHY FAS Ltd, UHY’s member firm in Japan, comments: “Japanese car manufacturers still have a relatively limited offering when it comes to battery electric cars even though they were very early adopters of hybrid technology. While some manufacturers in Europe are already implementing plans to produce only electric vehicles, that has not yet happened in Japan.”


* Battery electric passenger cars only, excludes hybrids

** Excluding those registering less than 1,000 electric car sales in 2020

*** Statista – number of cars sold worldwide


Notes for Editors

UHY global press contact: Leigh Lyons on +44 20 7767 2624

Email: –

Nick Mattison or Richard Crossan

Mattison Public Relations

+44 20 7645 3631

+44 74 4637 5555








By Rhys Madoc, CEO, UHY International

September 2021

If it has not done so yet, it probably should. Companies are facing unprecedented challenges with their workforce management. From recruitment to development to retention, the world of work is changing fast. Income pressures, working from home and personal wellbeing have been put under the spotlight. Employers and their clients alike will need to adapt and engage with the risks and opportunities that now present themselves.

According to one report, one in four workers are considering resigning in the wake of the pandemic. Research for Microsoft suggests that 40% of employees globally are thinking about handing in their notice. The fact is, Covid has fundamentally reworked the rules. Employee expectations have changed, and businesses that fail to grasp this fact risk losing good people, may struggle to recruit, and find themselves without the skills they need in a post-pandemic world. Conversely, employers who recognise change and embrace it may find themselves with a competitive advantage and an inflow of talent.

Here are just a few of the ways work has changed in the last 18 months, and what they mean for your talent management strategies:

Remote working

Most obviously, many employees have got used to working from home. They may not want to do it all the time, and there are business benefits to having employees in the same physical space on at least one or two days a week. But flexible work is here to stay for many organisations, often in ‘hybrid’ form. If you do not offer it, and competitors do, attracting top talent and keeping yours, could be much more difficult.


According to the Microsoft study I referenced above, exhaustion and burn out are leading many employees to start contemplating a simpler life. High productivity during the pandemic has masked the fact that many employees feel overwhelmed, isolated and anxious. Businesses need to recognise this fact. Those that heighten their focus on employee wellbeing are likely to reap the rewards of greater loyalty and higher retention rates. A corporate culture that judges performance on the quality of work employees produce, rather than the time they spend at their desks, is likely to win out in the “new normal”.


It will not have gone unnoticed by your most valuable employees that a new acceptance of home working means the pool of businesses they could work for has grown exponentially. Quite simply, they no longer have to live within commuting distance of work. While this could threaten the stability of your team, it is also an opportunity. Some of our member firms are already finding that the ability to recruit new staff outside the office catchment has widened. Others like the idea of being able to open smaller regional offices to support hybrid working.

Naturally these are new considerations that may enhance your strategies – they will not replace the core motivations of having an employee-centric company culture. Flexible working is certainly part of that, but you might also consider other benefits that employees consider of real value, like continual learning opportunities and enhanced parental leave.


The pandemic has proved technology’s worth to the extent that, according to a recent McKinsey survey, Covid has accelerated many businesses’ digital transformation strategies by three or four years.

Businesses that do not keep up risk losing talent to those that do, because your employees want those digital tools. They want easier communication and collaboration, and they want automation that takes dull and repetitive “drudge” work away and leaves them free for more creative or challenging tasks.

Organisational change

As a professional services provider we know you rely on us having the right people in the right places to help you successfully meet business challenges. There is no doubt that for the accountancy profession, accelerating technology adoption provides challenges of its own.

Game-changing technology like artificial intelligence, deep data analytics, cloud accounting and, in the future, blockchain technologies, require a new injection of skills and expertise into professional businesses like ours, and talent strategies will need to reflect the changing shape of organisations. Some experts predict that effective professional practices will shift from a traditional hierarchy (pyramid) to a more diamond shape, with a ‘fat middle’ of specialists recruited and developed to manage a wide range of products, processes and technologies, enabling partners and experienced audit and accounting managers to focus on client relationships. This makes for a very different career path compared to traditional rungs of the ladder, and I am already seeing this in our own network as member firms realign their people strategies and business models to best meet the needs of clients.

Our collaborative culture

Over the 35 years that the UHY network has been operating, our member firms have created a global culture that promotes collaboration between colleagues, regardless of geography.

When clients need specialist expertise, or partners need fresh ideas to invigorate their business, our people can call on an international network of colleagues for assistance. Help is only ever a call or email away and this has been critical during the pandemic.

I truly believe our collaborative culture makes for a better client service; it also makes UHY member firms better places to work and develop a career.

Image acknowledgements:
Homeworking, Photo by May Gauthier on Unsplash
Screens, Photo by ThisisEngineering RAEng on Unsplash
Video meeting, Photo by Christina @ on Unsplash

China created 1.25 million more new businesses during Covid pandemic – leading the world in new business creation...



China saw the number of new businesses it created grow by 1.25 million in 2020, giving it first place among 22 countries in a study of new business creation around the world during the Covid-19 pandemic by UHY, the international accountancy network.


UHY’s study shows that over 25 million new businesses were created in China in 2020, up 5% from the over 23.7 million created in 2019. Since 2015, the Chinese government has signalled a focus on entrepreneurialism in China by repeatedly emphasising its role in the country’s economic strategy. In November 2020, the government also stressed the key role to be played by small businesses in driving China’s recovery from the pandemic.


Liqian Sun, Director at Zhonghua CPA LLP, UHY’s member firm in China, comments: “China has made significant strides in fostering entrepreneurialism over recent years and the pandemic has not been able to slow that. Enterprise has been a key element of China’s economic strategy over the last five years and these figures show how that approach is bearing fruit. There are an astonishing number of microbusinesses being created every year in China.”


United States sees sharp percentage growth in new business creation

However, says, UHY, the United States saw a much larger increase in new business creation in percentage terms. The US saw 4.4 million new businesses created in 2020, a sharp 27% increase on 3.5 million businesses created in 2019 (see table below).


UHY says that Covid-19 has triggered a wave of entrepreneurialism in many countries including the US as people were forced out of work or furloughed due to the effects of the pandemic. Industries such as online retail have seen particularly strong surges in new business registrations as consumer behaviour was forced to change by lockdown restrictions.


This increase in new business creation is also likely to have been influenced by greater availability of business lending during 2020.


Dennis Petri, Chair of UHY International, comments: “The surge in new business creation in the United States over the past year has been remarkable. Some of this will be down to necessity – people losing jobs and striking out on their own due to a lack of other options. But much more will be entrepreneurs seeing opportunity amid the disruption of the pandemic, particularly in online retail.”


Nine countries of 22 in the study saw significant increases in new business creation in 2020 compared to 2019, including major economies such as the United Kingdom, France, Brazil and India. The largest percentage increase was seen in the Philippines, where new business creation grew 152% in just a year.


Michael Aguirre, Founder at UHY M.L. Aguirre & Co, UHY’s member firm in the Philippines, comments: “2020 saw a huge number of registrations of new online businesses in the Philippines. Our economy is rapidly digitalising and that is creating greater opportunity for entrepreneurs. The money made available to businesses through government-backed loans has also been helpful to many.”


“The next challenge is to lower costs and red tape for new businesses in the Philippines. If that can be achieved, we can create an even more vibrant startup economy.”


Risk of two-speed system emerging as some European economies are left behind


However, says UHY, there is a risk of a two-speed system emerging in which some European economies see much lower rates of new business creation. The 13 countries in UHY’s study which saw new business creation fall in 2020 is dominated by European economies, including Spain, Italy, Germany and Poland.


Across the 11 European countries in UHY’s study, 3.27 million new businesses were started in 2020, a decline of 1.6% from the 3.32 million new businesses created in 2019. This compares to a 7.2% increase across the 11 non-European countries in the study.


Adds Dennis Petri: “As the Covid recovery accelerates, economies worldwide need new business creation to drive economic growth. European governments should be looking at their tax policies to ensure they are doing everything they can to empower entrepreneurs to grow new businesses, create employment and increase their tax base.”


UK sees record new business creation during pandemic


UHY says that the United Kingdom was among the countries to see the fastest rise in new business creation during the pandemic, with a 14% increase in new businesses started in 2020 compared to 2019. It adds that data from the country’s tax authority show that more new businesses were created in March 2021 than in any month on record.


Martin Jones, Partner at UHY Hacker Young, UHY’s member firm in the UK, comments: “Entrepreneurs in the UK have really used the pandemic and lockdowns as a springboard to start businesses. Covid-19 has created opportunity for people brave enough to identify and capitalise on the huge change we have seen over the last 18 months.”


“We now look back on the last recession as a period where many of the UK’s leading tech and fintech businesses were started. In a decade it’s likely we will see the pandemic period as a similarly crucial period for entrepreneurialism.”


China leads the way for new business creation during the pandemic – over 25 million new businesses started in 2020


Notes for Editors

UHY global press contact: Leigh Lyons on +44 20 7767 2624


Nick Mattison or Richard Crossan

Mattison Public Relations

+44 20 7645 3631

+44 74 4637 5555