Paying Taxes 2009 - The Global Picture
This is the third Paying Taxes publication based on the "paying taxes" indicator from the Doing Business project. The project assesses the ease of paying taxes as part of a broader analysis of regulations relevant to domestic, small- to medium-sized companies in 181 economies around the world.With the current global economic turmoil, economies around the world will be finding that tax revenues are coming under pressure. This will cause them to examine the effectiveness of their tax systems – not just the rates that they charge but the way the systems work. The aim of the Doing Business project is to provide an objective basis for improving the regulatory environment for business, informing the analysis of regulatory burden and providing insight for reformers.
The report draws on the Doing Business 2009 report that measures the ease of paying taxes for mid-size domestic companies in 181 economies, analyses tax systems and tracks related reform efforts. It includes examples of how 18 economies have made use of data from the previous global Doing Business reports and provides insight into discussions with governments and other stakeholders generated by earlier Paying Taxes reports.
Who makes paying taxes easy and who does not
|
Easiest
|
Rank
|
Most difficult
|
Rank
|
| Maldives | 1 | Panama | 172 |
| Qatar | 2 | Jamaica | 173 |
| Hong Kong, China | 3 | Mauritania | 174 |
| United Arab Emirates | 4 | Bolivia | 175 |
| Singapore | 5 | Gambia | 176 |
| Ireland | 6 | Venezuela | 177 |
| Saudi Arabia | 7 | Central African Republic |
178 |
| Oman | 8 | Congo, Rep. |
179 |
| Kuwait | 9 | Ukraine | 180 |
| Kiribati | 10 | Belarus | 181 |
Paying Taxes 2009 finds that in 2007/08:
- Thirty-six economies made it easier to pay taxes. This year’s top reformer is the Dominican Republic. Malaysia is the runner-up.
- The most popular reforms were reducing corporate income tax rates (in 21 economies) and improving electronic filing and payments systems efficiency (in 12 economies).
- Eight economies reduced the number of taxes paid by business.
- On average, corporate income tax accounts for only 13 percent of tax payments, 26 percent of compliance time, and 37 percent of the total tax rate (tax cost to the case study company).
- Employment taxes account for 34 percent of the total tax rate, taking into account only amounts borne by the employer. Employment taxes are particularly prevalent in the European Union and account for 65 percent of the total tax rate for the case study company in the region.
- On average, 36 percent of the overall time to comply with tax systems and 48 percent of the number of tax payments are spent on consumption taxes.
Measuring performance against global best practice
Paying Taxes 2009 gives policymakers the ability to measure tax regulation performance in comparison to other countries, learn from global best practices, and prioritize reforms. The indicators can also be used to analyze economic and social outcomes such as informality, business start-ups, and investment.The report is a joint publication of the World Bank, International Finance Corporation, and PricewaterhouseCoopers.
Press release: New report finds that 21st century economies can benefit from simpler business tax systems (