The Paying Taxes study remains unique. It measures the ease of paying taxes across 189 economies by assessing the time required for a case study company to prepare, file and pay its taxes, the number of taxes that it has to pay, the method of that payment and the total tax liability as a percentage of its commercial profits.
The results show that tax policy issues are becoming ever more challenging. There are pressures on tax authorities to raise revenues, to fund social expenditures but also to ensure that their tax system fosters business investment. The business environment is complicated and has the potential to become even more so with complex tax legislation and onerous administrative obligations. It is not surprising therefore that in the most recent edition of the PwC Global CEO survey nearly two-thirds of CEOs around the world say the international tax system is in urgent need of reform and 70% say the impact of tax on their company’s growth is among their top concerns.
For more interesting results and to extract data based on your preferences click here.
The Romanian CEOs think there are three main global trends that will impact their companies in the next few years, according to the 17th edition of the PwC Global CEO Survey. Almost all believe that technological breakthroughs will have a major impact. More than half of respondents state that they will feel the impact of demographic changes, as well as resource shortages and climate change. Also, urbanisation is one of the global trends that will reshape businesses.
According to the findings of the 2014 CEO Survey in Romania, 92% of the CEOS have mentioned technological breakthroughs as one of the three main global trends that will transform their companies in the next five years. The percentage is higher than the Global and European ones (81%). Both climate change and resource shortages have been mentioned by 51% of the Romanian CEOs, while urbanisation was mentioned by 47% of them.
“There is a wide consensus among the Romanian CEOs about the role of technological breakthorughs in reshaping their companies in the next few years. On the background of a stronger feeling that the future started yesterday, innovation is the most important opportunity for growth. And innovation is not just about manufacturing techniques or developing new services, but also about ways to approach and attract clients”, stated Vasile Iuga, Country Managing Partner, PwC România.
This is the fourth consecutive year when PwC Romania launches a separate edition based on the answers of an increasing number of local CEOs who joined our initiative. PwC gathered valuable insight on their views and on their strategy when it comes to tackling opportunities for growth, or to dealing with challenges of local and global economies.
This year’s edition of the Global CEO Survey was released earlier this year within the World Economic Forum at Davos and it presents the perspective of more than 1344 CEOs worldwide on the current economic situation and their take on building a stronger foundation for future growth.
Organisations often don’t grasp the true financial impact of an economic crime until after it has happened — sometimes well after. As in previous years, The Global Economic Crime Survey underscores that the cost of fraud — both in financial and non-financial terms — is significant.
Nearly one in five (18%) organisations suffering fraud experienced a financial impact of between US$1 million and US$100 million. And the percentage of respondents reporting losses in excess of US$100 doubled, from one to two percent.
These large losses may be connected to the reported increase in incidents of bribery and corruption — frauds which can be especially costly to organisations, with regulatory fines, legal fees and remedial expenses easily reaching billions of dollars.
But economic loss is not the only concern that companies face when combating fraud. Survey respondents pointed at damage to employee morale, corporate and brand reputation, and business relations as some of the most severe non-financial impacts of economic crime.
When taking into account the secondary damage, the true cost of an incidence of economic crime can be long lasting. Consider the long chain of adverse events can follow a single, high-profile incident of economic crime:
lost revenues, as customers look for other business partners;
delayed entry to new markets due to regulatory issues;
a battered stock price; and
declining productivity and morale.
Fortunately, top management appear to understand the importance of collateral impacts: the 2014 Global CEO Survey reports that half of chief executives (a sharp increase from 37% just a year ago) see a “lack of trust in business” as a key marketplace issue, with significant majorities recognizing that business has a wider role to play in society than just building shareholder value.
“Delusions of Safety – The Cyber Savvy CEO: Getting to grips with today’s growing cyber-threats” video addresses a serious cyber security issue, using a fictitious scenario.
It illustrates why leadership by a CEO who truly understands the risks and opportunities of the cyber world, will be a defining characteristic of those organisations, whether public or private sector, and will realize the benefits most effectively.
This video can be used as supporting material for a Crisis Management exercise or Security Awareness program.
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
PwC is running an yearly survey to highlight the contribution family businesses make to economies and communities around the world. This year, 1,952 family businesses took part in this survey from over 30 countries, including, for the first time, Australia, China/Hong Kong and India. From Singapore to South America, the results look at the unique challenges that family businesses face regardless of where they are in the world. The respondents could not have been more varied in size, industry and location, yet there was marked similarity in their approach to business and in what they considered to be distinctive characteristics of businesses like theirs.
Here are some key findings:
65% have grown sales in the past year (compared to only less than half in 2010)
Almost 60% say attracting the right skills/talent will be a key challenge in five years’ time
64% think the general economic situation will be their key challenge in five years’ time
Over 60% see the need to continually innovate as the key internal challenge in five years’ time
A quarter of our respondents’ sales are currently international; this will rise to 30% in five years’ time
How do your challenges, strengths and resilience compare to those of your peers across the world? What are your plans, if any, for expansion — and succession — in the coming years? What do you see the role of government being?
PwC has an online tool available for you to benchmark your business across a range of crucial, family-firm-relevant metrics.
Why do we take non-productive decisions? This is a question easy to hear nowadays. I believe one of the answers (probably the most important one) comes from a Market Research Executive Board report: almost all executives agree that customer focus is critical to their company’s success – yet only 40% of senior executives feel that they have the support and tools that they need to be customer focused.
And why is that? – we may ask. Well, research into the customer decision-making environment reveals that the Research function—the organizational owner of customer knowledge, one of three components of customer focus – is currently set up to impact only 10% of the company’s customer-facing decisions. This leaves 90% of decisions being made based on “gut instinct” and/ or insights and information provided by other sources.
Not long ago I realised the importance of client facing behaviour – more details in this article – and decisions inside the firm will definetly impact this behaviour directly.
How do we measure the environmental impact? This has been one of the constant challenges when we refer to other industries than petrochemicals where impact can be somehow measured. Puma, with the support of PwC and Trucost, recently showed the results of its first product level Environmental Profit & Loss (E P&L) accounts which value the environmental impacts of products in euros and cents.
The results compare the environmental impacts from cradle to grave of a conventional shoe and T-shirt with more sustainable alternatives and illustrate how a sustainable approach to production reduces the impact on the environment by a third compared to conventional products. The analysis focused on the environmental impacts caused by greenhouse gas (GHG) emissions, waste and air pollution, as well as the use of natural resources such as water and land along the entire value chain from the generation of raw materials and production processes to the consumer phase when customers use, wash, dry, iron and finally dispose of the products.
What good is such a measurement for? On one hand it brings into sharp focus the debates over commodity pricing, natural resource security and supply. It also challenges conventional business thinking – and consumers’ views – on how we measure and monitor the embedded environmental value and impacts of what we buy. On the other hand, natural resource scarcity and pricing is no longer an academic debate, it is an issue for every business and consumer. Measuring and pricing the impacts is the first step to understanding what we need to do to live within the constraints of our planet. It puts consumer and business buying decisions on the front line of the environmental and resource scarcity debates.
Are consumers willing to pay a significant premium for sustainable goods? I think not. However, when the prices and quality are similar, one may assume that the more sustainable product will fly off the shelf before the others.
The chances of Greece departing the Eurozone are rising sharply so what chances are there that Grece will remain in the Euro as a compromise? Spanish banks are still holding an estimated Euro 600bn of mortgages at full value on their books so Spain will be the next big test for Europe. Spanish and other Eurozone banks are going to require hundreds of billions of Euro recapitalisation in the next 12 months.
On January 2012, Congressional Research Services looked into possible scenarios regarding the Eurozone and their impact on US economy. Latest indicators from the US are mixed and patchy but this economy is out-performing the Eurozone. CEEMEA’s central outlook remains 3-5 years of sub-par economic growth, continuous Eurozone crises and tough global business conditions. PwC also provided four scenarios, including one where Greece would exit the Eurozone.
What does this mean to your business?
The risks for a worse outlook have intensified since March/April and Eurozone restructuring has the potential to create significant change and disruption to the operations of many organisations. Global companies (both headquartered in the Eurozone and ones with extensive links with it) will be impacted across their whole value chain.
There will be:
Treasury changes (e.g. liquidity and financing, security over banking arrangements);
IT changes (e.g. systems configuration, payment and billing systems changes, master data, transaction data migration, package applications and support arrangements);
Planning, benchmarking and forecasting (e.g. contingencies, restatement of historical data, costs to implement the Eurozone restructuring);
Challenges in communications to shareholders, stakeholders, customers and suppliers regarding organisational impact and arrangements to manage the impact.
How one can cope with all these challenges? Here are some suggestions:
Evaluate your supply chain risk, particularly where raw materials become expensive for suppliers no longer in the euro-zone;
Develope business cases / risk analysis to take advantage of potential new sourcing opportunities and provide delivery support to realise these benefits;
Run rapid diagnostic tools that can be deployed simultaneously across Finance (EPM Blueprint, Finance Effectiveness);
The break-up of the Eurozone may even give rise to opportunities from a tax perspective: identify them and work to build them into existing contingency plans should the right commercial fact patterns arise in the future.
As companies globalise, they face a growing body of diverse and complex regulations. The global regulatory environment is changing faster than companies can absorb. This is why CEOs consistently report overregulation as a threat to business growth. And it’s not getting any easier; according to the CEO Survey, only 31% of CEOs believe that regulations will be harmonised among governments. However, the successes of the private and public sectors are increasingly intertwined. Effective partnership models are emerging around the world, ranging from improved communication and better coordination to true collaboration, depending on the market.
71% of CEOs plan to increase investment in an area they also believe is one of the government’s top-three priorities: developing a skilled workforce. And increasingly, governments are making this a top priority. Countries as well as companies are competing for talent, and some governments are investing a lot to make their workforces more competitive. For example, the Singapore government partnered with a local university to launch a talent development programme, bringing together professional services firms, universities and business schools.
Workforce skilling is just one area of focus. Intellectual property, health care, energy, infrastructure, immigration, tax, financial sector convergence… these are major areas in which leaders from both public and private sector organisations say they can work together more effectively to achieve common goals.