local_atm Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. In Doing Business 2017, the indicator’s methodology was expanded to include a new measure of complying with postfiling procedures. The most recent round of data collection for the project was completed on June 1, 2016 covering for the Paying Taxes indicator calendar year 2015 (January 1, 2015 – December 31, 2015).

This year the scope of data collection has been expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on three post-filing processes: VAT refund, tax audit and administrative tax appeal. The data shows where postfiling processes and practices work efficiently and what drives the differences in the overall tax compliance cost across economies. The data on the structure of a first level administrative appeal process is not included in the distance to frontier score of paying taxes.

The new section covers both the legal framework and the administrative burden on businesses to comply with postfiling processes.  See the methodology for more information.

Distance to Frontier

The distance to frontier score aids in assessing the absolute level of regulatory performance and how it improves over time. This measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. This allows users both to see the gap between a particular economy’s performance and the best performance at any point in time and to assess the absolute change in the economy’s regulatory environment over time as measured by Doing Business. An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. For example, a score of 75 in DB 2015 means an economy was 25 percentage points away from the frontier constructed from the best performances across all economies and across time. A score of 80 in DB 2016 would indicate the economy is improving. In this way the distance to frontier measure complements the annual ease of doing business ranking, which compares economies with one another at a point in time.