In this year’s report PwC’s focus is on the key themes revealed by the latest study, and has put it in the context of the eight years of data they have compiled since the inception of their Paying Taxes survey (2004 – 2011). They’ve analysed this data both at the global and the regional level, and included additional analysis which compares the Paying Taxes indicators with some broader macroeconomic indices of growth and investment.
The economies in Central Asia & Eastern Europe have led the charge over the period of the study to improve their tax compliance procedures and also to reduce their tax rates. Economies in this region have shown the largest fall in both the time to comply (200 hours) and number of payments (22.2) and apart from the Middle East have the largest fall in the Total Tax Rate (12.6%).
While the Total Tax Rates for Africa still appear to be high, if the three countries with cascading sales taxes are excluded then the average falls to a level which is just above the world average, leaving South America as the region with the highest Total Tax Rates. Therefore, the highest number of payments is now made in Africa (37.0) whilst compliance continues to take longest in South America (619 hours).
The developed economies of Europe and North America not surprisingly have the most efficient tax systems but Total Tax Rates can be high, driven in many cases by numerous labour taxes and social contributions. The lowest number of payments is now made in North America (8.3) followed by the EU & EFTA (12.8).
It is not surprising that the economies in the Middle East feature so prominently in the top jurisdictions of the Paying Taxes indicators. This can largely be attributed to the relatively few taxes levied on the case study company and a reliance on other sources of government revenues. The expectation is that this will change as new revenue raising measures are introduced.Middle Eastern states have the lowest average Total Tax Rates (23.6%) and the lowest time to comply (158 hours).
For a closer look into your country’s tax compliance and a benchmark against other countries have a look @ http://pwc.to/XBSTiN