Paying Taxes 2013

The global picture

Authors: World Bank Group and PwC
Published: November 21, 2012 (5547.3 KB PDF)

Overview

This report finds that governments continue to reform their tax systems despite global economic uncertainty, with 31 economies having taken steps from June last year through May 2012 to make it easier and cost less for small and medium businesses to pay taxes. Paying Taxes 2013, a joint effort of the World Bank, IFC, and PwC, looks at tax regimes in 185 economies and finds that the most common tax reform is the introduction or improvement of online systems for tax compliance, which occurred in 16 economies.

Main Findings

Business tax reforms continue around the world. However the number of economies reforming their tax systems has fallen from 35 last year to 31 in the most recent study. The focus continues to be on reducing the administrative burden of the tax system.
On average it now takes our case study company 267 hours to comply with its taxes, it makes 27.2 payments and pays an average Total Tax Rate of 44.7%.
While the time to comply and number of payments have continued to fall significantly in 2011, the rate of decline for the Total Tax Rate slowed. The Total Tax Rate fell by 0.3%, the number of hours fell by a day and the number of payments by almost 2.
On average across the eight years of the study the cost of tax, the Total Tax Rate has fallen by almost 1% for each year; the time to comply has fallen by 54 hours (seven days); and the number of payments has fallen by 6.5.
In 2011 the average rate of profit tax has remained flat while the rate for labour taxes and social contributions increased by 0.1% and for ‘other’ taxes fell by 0.4%.
Corporate income tax continues to represent only part of the tax burden on business – it accounts for only 12% of payments, 26% of time and 36% of the Total Tax Rate. This profile has changed very little over the eight years of the study.

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