Paying Taxes 2015: The Global Picture

Authors: World Bank Group and PwC
Published: November 20, 2014

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Overview

Paying Taxes 2015, 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 the ten years of the study, 78% 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 contributions made by businesses to public finances. Corporate income tax (and other profit taxes) accounts for only 12% of payments and 27% of time.

Main Findings

  • On average around the world it takes the standardized case study company 264 hours to comply with its taxes. The company made 25.9 payments and paid an average total tax rate of 40.9%.
  • The range for each sub-indicator in 2013 is very wide. The number of payments ranges from 3 in Hong Kong SAR, China and Saudi Arabia to 71 in República Bolivariana Venezuela. Time to comply is still the highest in Brazil. It takes 2,600 hours, or more than a year for a full time person, with more than half of this time being spent on consumption taxes.
  • The pace of reform accelerated during the financial crisis, slowed in more recent years, but improvements have continued. 379 reforms making it easier and less costly to pay taxes have been recorded since 2004; 105 of these relate to electronic filing and payments.
  • Consumption taxes have consistently been the most time consuming, though labour taxes and social contributions have required almost as much time. Profit taxes have always taken the least amount of time. The time needed to comply with labour taxes have fallen by 23 hours since 2004, for consumption taxes the reduction is 21 hours and for profit taxes it is 15 hours.
  • 43% of the economies in the study have already implemented electronic systems for filing and payment of taxes for at least one type of tax and which are used by the majority of companies. Many more economies have electronic systems available for filing or payment, but they are used by less than half of companies.