Australia’s passport ranking has taken a hit, dropping to a shared 26th position in the latest global citizenship rankings by Nomad Capitalist. The decline is primarily attributed to the country’s taxation policies, which have negatively impacted its overall score.
Nomad Capitalist, a consultancy firm specializing in global citizenship and residence solutions, evaluates 199 countries based on five key factors: visa-free travel, taxation of citizens, global perception, dual citizenship, and personal freedom. While Australia excelled in several areas, its taxation rules proved to be a significant drawback.
Taxation Policies Impact Australia’s Ranking
The report highlights that Australia scored a mere 20 out of a possible 50 points in the taxation category. This score was achieved largely because Australia does not impose taxes on citizens who relocate abroad. However, the country’s taxation policies for residents remain stringent compared to other nations.
“For the Australia Taxation score calculation, we relied on data from our network of tax vendors, news sources, and tax authorities themselves. We assigned the lowest score of 10 to countries that tax citizens no matter where they live, scores of 20 or 30 to countries that allow citizens to relocate to avoid tax,” Nomad Capitalist explained.
Countries like Vanuatu, which do not charge personal income tax, scored a perfect 50 in this category, setting a high benchmark for others.
Strengths in Perception and Freedom
Despite the setback in taxation, Australia performed exceptionally well in other areas. The nation received perfect scores of 50 in global perception, personal freedom, and dual citizenship availability. These strengths reflect Australia’s strong international reputation and the freedoms enjoyed by its citizens.
“For the Australia Freedom score calculation, we relied on data and news reports on mandatory military service, government surveillance, press freedom, and other factors to determine the personal freedom of citizens, travellers, and expats, with scores from 10 being the least free and 50 being the freest,” the report noted.
Australia’s liberal stance on dual citizenship and its robust personal freedoms contribute significantly to its high scores in these categories.
European Nations Lead the Rankings
While Australia faces challenges, several European countries have excelled in the rankings. Malta secured the top position, followed closely by Ireland, Greece, and Romania, which all tied for second place. These nations benefited from high scores in areas such as dual citizenship, perception, and freedom.
Greece, for instance, scored highly for its visa-free travel options, while Ireland was praised for its global perception and personal freedoms. Romania also performed well in the freedom category, showcasing the advantages of its liberal policies.
Implications and Future Prospects
The drop in Australia’s passport ranking underscores the importance of taxation policies in global citizenship evaluations. As countries compete for talent and investment, attractive tax regimes can significantly enhance a nation’s appeal. Australia’s government may need to reconsider its taxation policies to improve its standing in future rankings.
Meanwhile, the strong performance of European nations highlights the benefits of flexible citizenship policies and robust personal freedoms. As global mobility becomes increasingly important, countries that offer favorable conditions for citizens and expatriates are likely to continue leading the rankings.
Looking ahead, Australia may focus on leveraging its strengths in perception and freedom while addressing its taxation challenges to regain a higher position in the global passport rankings.
