Paying Taxes 2008 - The Global Picture
"Paying Taxes 2008" offers data on total tax rates, payment frequency, and the time needed to comply with tax regulations in 178 economies. This year's report finds that business taxation goes well beyond corporate income taxes. It identifies five types of taxes that firms pay: profit, social, property, turnover, and other taxes, such as municipal fees and fuel taxes. The number of steps, time requirements, and various cost indicators are used to determine the overall burden of paying taxes.Who makes paying taxes easy and who does not
|
Easiest
|
Rank
|
Most difficult
|
Rank
|
| Maldives | 1 | Panama | 169 |
| Singapore | 2 | Jamaica | 170 |
| Hong Kong, China | 3 | Mauritania | 171 |
| United Arab Emirates | 4 | Bolivia | 172 |
| Oman | 5 | Gambia | 173 |
| Ireland | 6 | Venezuela | 174 |
| Saudi Arabia | 7 | Central African Republic |
175 |
| Kuwait | 8 | Congo, Rep. |
176 |
| New Zealand | 9 | Ukraine | 177 |
| Kiribati | 10 | Belarus | 178 |
The report finds that differences are visible not only in tax rates but also in the administrative burden. It notes that:
The Maldives levies only one small tax on domestic business in the manufacturing sector (the property transfer tax) and only hotels and banks are taxed on their profits. Oil producing countries tend to impose low tax burdens for domestic firms in the manufacturing sector because governments generate revenue elsewhere. Outside of oil rich countries and the Maldives, the top performers whose business tax systems may be successfully emulated by other countries are Singapore, Hong Kong, Ireland and New Zealand.It concludes that more transparency and simplification is needed in tax reporting systems. Simplifying the tax system can encourage compliance and more transparency can help governments recognize the full contribution of businesses toward tax revenues.
Four of the bottom 10 countries have a TTR [total tax rate] above 100% of commercial profits. That means that a company with sales of 120% of cost of goods sold cannot make enough profit to pay all the business taxes. Seven of the bottom 10 countries have to pay taxes at least once a week and spend at least 65 days per year in the process.
Measuring performance against global best practice
"Paying Taxes 2008" gives policymakers the ability to measure tax regulation performance in comparison to other countries, learn from global best practices, and prioritize reforms. The indicators can also be used to analyze economic and social outcomes such as informality, business start-ups, and investment.The report is a joint publication of the World Bank, International Finance Corporation, and PricewaterhouseCoopers.
Press release: Paying Taxes Is Getting Easier but More Reform Is Needed (