Taxes are essential to economic and social development and there is no doubt about the need for and benefits of taxation. But how economies approach taxation varies substantially. Paying Taxes is a joint annual publication by PwC and the World Bank which examines the impact of tax systems on business using a case study company in 183 economies.
The study, which looks beyond corporate income tax to all of the taxes and contributions mandated by government, enables an assessment of tax systems around the world from the point of view of business to determine the full impact of taxation in terms of cost and compliance burden.
Based on the recently released 2012 Paying Taxes Study, Nigeria now ranks 138 out of 183 economies on the ease of paying taxes compared to a ranking of 134 in the previous year. Put differently, this means that in Nigeria, a medium size company on average pays nearly one third of its commercial profit in taxes, spends over 23 weeks in a year dealing with its tax affairs and makes a tax payment every 10 days. With this, Nigeria is far behind many of the leading investment destinations in Africa including Mauritius which ranks 9, South Africa 36 and Ghana 87.