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1990s and drawing foreign investment away from traditional tax havens such as Switzerland. Finland, Sweden and Denmark have also realised significant economic growth, in part due to tax reductions, states the report. With an average tax rate equal to the world average of 27%, they are today among the top ten in the world when measured in terms of economic growth and competitiveness (see EurActiv 27 Sep. 2006). The apparent positive impact of low corporate tax rates on economic development has led to a worldwide drop in rates. In the EU, rates dropped by 32% over the past 14 years, down to 25.8%. The drop is largely due to the entry of the ten new members in 2004, which have tax rates among the lowest in Europe, but other countries, such as Austria, Germany, Portugal and have Italy, also slashed their rates. The British Chamber of Commerce will on 2 November call on UK Chancellor of the Exchequer Gordon Brown to to allow the UK to remain competitive on a global scale by cutting corporate tax rates to match the EUs 25% average. As rivalry among EU countries intensifies, the fear of a race to the bottom that would generate a public-funding crisis has sparked the debate about whether business taxes should be harmonised within the Community. In April 2006, the Commission suggested harmonising tax bases (see EurActiv 3 April 2006) but the proposal has received mixed reactions from member states. Links EU official documents Commission (speech): Commissioner Lszl Kovcs: Making the EU tax-competitive (10 October 2006) Surveys and data KPMG International: Global competition leads countries to chase growth through lowering tax, says KPMG International (1 November 2006) KPMG International: KPMGs Corporate Tax Rate Survey - Summary and Comment (1 November 2006) KPMG International: KPMG's Corporate Tax Rate Survey (1 November 2006) Press articles Financial Times: Low corporate tax boosts countries competitiveness The Financial Standard: Corporate tax needs to be more competitive: KPMG Times Online: BCC calls for tax cuts in all areas of business Swissinfo: Switzerland losing corporate tax advantage in Europe Swissinfo: Menaces sur le paradis fiscal suisse Innovations report: Steuerstz...