Paying Taxes 2016, a joint effort of the World Bank Group and PwC, looks at tax regimes in 189 economies and provides an unrivalled global database. The results illustrate both successful reforms and reform challenges, as well as provide a platform for governments and businesses to engage in constructive discussion around tax reforms across a broader range of issues. Over eleven years of the study, almost 80% of the 189 economies covered in the report made significant changes to their tax regimes at least once. All three sub-indicators – the time to comply, number of tax payments and the total tax rate – have fallen consistently over the period of the study reflecting the reforms that governments have implemented making paying taxes easier for businesses and governments. This report also shows that corporate income tax is only part of the picture when looking at the contribution made by a business to public finances. On average around the world corporate income tax (and other profit taxes) accounts in 2014 for only 40% of the total tax rate, 13% of payments and 26% of time.
- On average in 2014, the case study company paid an average Total Tax Rate of 40.8%, took 261 hours to comply with its taxes and made 25.6 payments.
- In 2014, 40 reforms that made it easier or less costly to pay taxes were implemented. Reforms continue to be made in most geographic regions, though progress is less evident in South America where the average time to comply and Total Tax Rate are the highest in the world.
- Over the ten editions of Paying Taxes, the three sub-indicators have fallen steadily since 2004, but the decline has slowed in recent years. Since 2004, the average number of payments has reduced by 8.2, the Total Tax Rate by 11.4 percentage points, while the time to comply has fallen by 61 hours.
- The range of the number of payments sub-indicator, i.e. the difference in payments between the economy with the most payments in a year and the economy with the fewest, has decreased over the ten editions of Paying Taxes, from 144 payments in 2004 to 67 in 2014.
- Low income economies have shown least reform for the compliance sub-indicators over the ten editions of Paying Taxes. This relative lack of improvement in the low income group might suggest that while reform is clearly still necessary, there are some challenges that are yet to be overcome and these may include matters other than the tax system.
- From 2004 to 2010, the most common reform was the reduction of profit taxes. From 2010, the most common reform was the introduction and improvement of electronic systems. By 2014, 84 economies had fully implemented electronic filing and payment of taxes. In 2005, the earliest year for which we have data, only 46 economies had such a system.