Paying Taxes records the taxes and mandatory contributions that a medium size company must pay in a given year as well as measuring the administrative burden of paying taxes and contributions.
Taxes and contributions measured include corporate income and other profit taxes, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and any other small taxes or fees.
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Reforms continue to be made in Africa, while progress is less evident in South America. South America now has the highest average time to comply and Total Tax Rate.
Central Asia & Eastern Europe is still the fastest reforming region with a major focus on improving administrative systems. All three sub-indicators have fallen with the number of payments and time to comply both now below the world average.
Although the region shows the greatest overall drop in the Total Tax Rate since 2004, it is still a very difficult region in which to pay tax. The Total Tax Rate increased this year, with time to comply and number of payments decreasing.
Apart from the Middle East it is the region with the lowest average Total Tax Rate.
All three sub-indicators fell slightly in 2014. All are below the global average and have been since the study began. While the average time to comply fell in the latest period, this is a mix of large reductions in some economies offset by significant increases in others.
The region experienced the greatest fall in the Total Tax Rate of all the regions for 2014. It remains the region where profit taxes account for the greatest share of the Total Tax Rate.
Most reformed region since 2004.
Since the first edition of Paying Taxes, the region has done the most to make tax compliance easier. However in 2014, for the first time since the study began, the region’s Total Tax Rate increased.
Twenty economies in the region made reforms which affected their Total Tax Rates, mostly by small amounts. Labour taxes account for a greater share of the Total Tax Rate than in any other region.
Despite a small increase in the Total Tax Rate in 2014, the region is the easiest in which to pay tax. It has the lowest Total Tax Rate and time to comply, and all of the sub-indicators have been very stable since 2004.
The three countries in the region have fully implemented electronic filing and payment systems, resulting in efficient compliance processes. Mexico abolished a profit tax in 2014 reducing the region’s time to comply still further.
While the Total Tax Rate and time to comply sub-indicators have decreased since last year, the region still has the highest Total Tax Rate and the highest time to comply. It is also the region where ‘other’ taxes account for the largest share of the Total Tax Rate.
Explore our interactive data modeller and compare tax regimes across 189 global economies.