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Countries With Lowest GST or VAT: Taxes play a significant role in every nation's economy. However, different countries have different taxation schemes. While many nations use Value Added Tax (VAT) or Goods and Services Tax (GST) to raise money, some maintain extremely low rates, and some don't impose any taxes at all. Because of their lower prices, these nations are very appealing to foreign investors, companies and even tourists. For instance, many Gulf nations do not rely significantly on consumer-based taxes because they generate enormous sums of money from oil and other natural resources. In a similar vein, financial centres and tiny island nations draw in international wealth by providing a tax-friendly environment with little to no GST/VAT.

In comparison, countries like India and European nations rely more on GST or VAT to fund infrastructure, healthcare, and other public services. However, the global list of low-tax or tax-free countries shows us how different economies function successfully without putting too much burden on citizens. From shopping-friendly places like Hong Kong to tax havens like the Cayman Islands, the idea of “zero or lowest GST” plays a key role in shaping global trade and travel. Let’s look at the top 20 countries where GST or VAT is either zero or among the lowest worldwide.

GST 2.0 Of India Explained

India recently introduced GST reforms in 2025 to make the tax system simpler and more consumer-friendly. Earlier, the GST rate was up 5% to 28%, which applied to most goods and services. After the reform, several essential items like packaged food, medicines, household appliances and daily-use products have been shifted to lower tax brackets, making them cheaper for common people. The current GST rate will have only three slabs 5%, 12% and 18%. Small businesses have also received relief with easier compliance and filing processes. However, luxury goods, tobacco and high-end services continue to remain in the higher slabs. These changes aim to reduce inflation and improve affordability while maintaining government revenue.

Top 20 Countries With Zero Or Lowest GST and VAT

Here is the list of the top 20 countries with Zero or the lowest VAT and GST below 10%;

Rank  Country GST / VAT Rate Notes
1 Bermuda 0%  No VAT or GST
2 Brunei 0%  No VAT or GST
3 Hong Kong 0%  No VAT or GST
4 Iraq 0% (General)  Only selective excise taxes (alcohol, tobacco, telecom, etc.)
5 Kuwait 0%  No VAT or GST currently
6 Qatar 0%  VAT framework planned, not implemented yet
7 Andorra 4.5%  Special 9.5% tax for the banking/finance sector
8 Oman 5%  VAT at 5%, some exemptions/zero-rated goods
9 Canada 5%  Federal GST; provinces may add their own sales/PST
10 Jersey 5%  GST
11 Nigeria 7.5%  VAT on goods and services
12 Panama 7%  VAT (ITBMS)
13 Taiwan 5%  VAT rate
14 Vietnam 8%  VAT reduced during the COVID recovery (standard was 10%)
15 Singapore 9%  (GST) Gradually increased from 7% → 8% (2023) → 9% (2024)
16 Japan 10%  Reduced the 8% rate for some food/beverages
17 Australia 10%  GST on goods & services
18 Thailand 10%  VAT
19 Laos 10%  VAT
20 South Korea 10%  VAT

Source: Global VAT compliance 

ALSO READ: GST 2.0 New Rates Announced: Full list Of What Will Get Cheaper And Costlier

In today’s world, GST and VAT play a big role in shaping the economy of most countries, but some nations have found ways to keep these taxes very low or even at zero. These countries often rely on income from tourism, natural resources, or global trade instead of putting a heavy burden on their citizens. That is why they are seen as tax-friendly destinations for businesses, travellers and investors. By comparing India’s GST system with these nations, we can clearly see how different tax models affect everyday life. Overall, countries with the lowest or zero GST/VAT show us that there is more than one way to run a successful economy.