The graph shows the 11 year trend for the three tax categories within the Total Tax Rate. The rate for all three components of tax type has fallen since 2004 though the rate of decline has plateaued in recent years. ‘Other’ taxes continue to account for the smallest proportion of the Total Tax Rate with the remainder shared broadly equally between profit and labour taxes, as has been the case since 2012. Interestingly, the average rate for both profit and labour taxes increased slightly in 2015, while the rate for ‘other’ taxes has fallen this year after a small increase in the previous year.
The graph shows the regional averages for the Total Tax Rate. Over the period of the Paying Taxes study, there is a general decline in the global average Total Tax Rate and this can also be seen at a regional level. Africa’s Total Tax Rate has decreased the most over the 11 years of the study with the removal of cascading sales taxes. South America currently has the highest Total Tax Rate (having recently overtaken Africa). All other regions have generally decreased their Total Tax Rates by varying amounts over the 11 years of the study.
The global average for time to comply has been decreasing over the 11 years of the Paying Taxes study. The split of the time to comply between the three types of tax has not significantly changed. Improvements in electronic tax systems and in information technology more generally continue to play a key role in reducing the time needed by taxpayers to file and pay taxes. In economies where electronic filing and payment have already been implemented, efforts are continuing to improve the systems further.
Central Asia and Eastern Europe and North America have also improved more than the other regions over the 11 years of the study. In the other regions, there have not been significant changes. This year South America’s time to comply reduced to under 600 hours for the first time, but it remains the region with the highest time to comply. EU and EFTA has improved so that it is approaching the Middle East’s time to comply, which is currently the lowest of all the regions. This is despite economies in the EU and EFTA region generally having more taxes and more complex systems than in the Middle East.
Similarly to the time to comply, the overall number of payments has fallen over the period of the Paying Taxes study and the proportion across the main categories of taxes has stayed roughly the same. Reductions have mainly been driven by the introduction and use of electronic filing and payment systems. If a tax is paid and filed online by the majority of medium-sized companies in an economy, then that tax is counted on the sub-indicator as having one payment, even though the tax may be paid more frequently.
The graph shows Central Asia and Eastern Europe has reduced its number of payments more than any other region over the 11 years of the study. Africa’s number of payments is currently the highest and has hardly changed over the same period. All other regions have fallen over the 11 years of the study. EU and EFTA is approaching North America’s number of payments, which is currently the lowest of all the regions.