London, England, 18 November 2010—Nearly
60 percent of the world’s economies have made significant business regulatory
changes to ease paying taxes, despite the impact of the downturn and the
sluggish global recovery, according to Paying Taxes 2011, a new
report launched today by PwC, the World Bank, and IFC.
The report, which looks at 183 economies,
finds that in the past year, 40 economies have made it easier to pay taxes,
with Tunisia improving the most. For economies that are included in both
the 2006 and 2011 Paying Taxes studies, the time needed to comply
has declined by a week, the tax cost has fallen on average by 5 percent,
and the number of payments has dropped by almost four. In all, 90 economies
have reduced taxes on corporate profits since 2006.
“Governments have continued to improve
and simplify their tax systems for local firms, and are seeing positive
results,” said Neil Gregory, Director of the Global Indicators and Analysis
department at the World Bank Group. “Best practices such as having one
tax per tax base and the use of technology can simplify the compliance
burden faced by firms.”
The Paying Taxes 2011 report
measures the ease of paying taxes by assessing the administrative burden
for companies to comply with tax regulations, and by calculating companies’
total tax liability as a percentage of pre-tax profits. According to the
study, the typical company measured pays nearly half of its commercial
profit in taxes, spends seven weeks dealing with its tax affairs and makes
a tax payment every 12 days.
"Taxes on company profits have
fallen each year as governments around the world have reduced their corporate
tax rates in an effort to encourage business investment and stimulate growth,"
said Susan Symons, Total Tax Contribution Leader, PwC UK. “However, easing
the compliance burden is also important for business and there is potential
for more focus on this area”.
The study shows that paying taxes is
easiest for business in high-income economies that have the lowest tax
cost and the lowest administrative burden. These economies tend to have
more mature tax systems, a lighter administrative touch, and greater use
of the electronic interface with tax authorities.
PwC firms provide industry-focused assurance,
tax and advisory services to enhance value for their clients. More than
161,000 people in 154 countries in firms across the PwC network share their
thinking, experience and solutions to develop fresh perspectives and practical
advice. See pwc.com
for more information.
'PwC' is the brand under which member
firms of PricewaterhouseCoopers International Limited (PwCIL) operate and
provide services. Together, these firms form the PwC network. Each firm
in the network is a separate legal entity and does not act as agent of
PwCIL or any other member firm. PwCIL does not provide any services to
clients. PwCIL is not responsible or liable for the acts or omissions of
any of its member firms nor can it control the exercise of their professional
judgment or bind them in any way.
About the World Bank Group
The World Bank Group is one of the world’s
largest sources of funding and knowledge for developing countries. It comprises
five closely associated institutions: the International Bank for Reconstruction
and Development (IBRD) and the International Development Association (IDA),
the International Finance Corporation (IFC); the Multilateral Investment
Guarantee Agency (MIGA); and the International Centre for Settlement of
Investment Disputes (ICSID). Each institution plays a distinct role in
the mission to fight poverty and improve living standards for people in
the developing world. For more information, please visit www.worldbank.org,
For more information about the Doing
Business report series, visit www.doingbusiness.org
For more information about Paying
Taxes, visit www.pwc.com/payingtaxes