Rome, Italy, November 20, 2009—Despite
the economic downturn, government focus around the world has remained on
tax reform, concludes a new report released today by the World Bank Group
and PricewaterhouseCoopers LLP. The report, Paying Taxes, finds
that 45 economies made it easier to pay taxes, almost 25 percent more than
in the previous year.
This year’s top reformer, Timor-Leste,
introduced a new tax law, streamlined the business tax regime, and simplified
tax administration. For the third year in a row, Eastern Europe and Central
Asia had the largest number of reforms, with 10 economies reforming.
“Government efforts to streamline tax
procedures and reduce time spent on compliance can make an important difference
for small and medium enterprises, especially in difficult economic times,”
said Penelope Brook, World Bank Group Director of the Global Indicators
and Analysis department. “This year’s top reformer reduced compliance
time by over 50 percent by rationalizing tax regulations, simplifying computation
rules, and reducing payments.”
The report measures the ease of paying
taxes across183 economies by assessing the administrative burden for companies
to comply with tax regulations, and also by calculating companies’ total
tax liability as a percentage of pre-tax profits. In the past five years,
the report has recorded 171 reforms affecting taxes in 104 economies worldwide.
While 20 economies have reduced corporate
income tax rates, 18 simplified the process of paying taxes. On average
across all of the 183 economies covered in the report, the standard case
study company measured has to make 31 tax payments and spend 286 hours
on calculating and paying its taxes.
The results show that corporate income
tax is just one of the taxes with which business must comply. On average,
the company pays 9.5 different taxes and corporate income tax accounts
for only 12 percent of payments, 26 percent of the time to comply, and
38 percent of the tax cost.
“The global recession has meant falling
tax revenues and difficult tax policy choices,” said Susan Symons, PricewaterhouseCoopers
LLP partner. “The challenge is ensuring sufficient public revenues for
the future while incentivizing investment and economic growth.”
For more information about the Doing
Business report series, visit www.doingbusiness.org.
For more information about Paying
Taxes, visit www.doingbusiness.org/taxes.
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,
provides industry-focused assurance, tax and advisory services to build
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