Paying Taxes 2013 – Tax reforms continue worldwide!

We are pleased to announce the release of Paying Taxes 2013, the seventh edition of our joint annual report with the World Bank and IFC. This is a unique study which investigates and compares tax regimes across 185 economies worldwide, ranking them according to the relative ease of paying taxes. Paying Taxes looks not only at corporate income tax, but at all of the taxes and contributions that a domestic medium-size case study company must pay. It considers the full impact of all these taxes in terms of both their tax cost and their compliance burden on business.

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As in previous years, the report is expected to be a catalyst for some interesting debate on tax systems and tax  reform, with businesses, governments, and tax authorities  around the world. This year there is a particular focus on the trends in the data over the eight years included in the study, and on how the results vary across eight geographical regions. Some of the key findings include:

  • The global average for our case study company is that it takes 267 hours for it to comply with its taxes, it makes 27.2 payments, and pays a Total Tax Rate of 44.7% on its commercial profits.
  • Since 2004 the Total Tax Rate has fallen by 7.7%; the time to comply fallen by 54 hours (seven days); and the number of payments fallen by 6.5.
  • In 2011 while the time to comply and number of payments have continued to fall significantly the average rate of decline for the Total Tax Rate has slowed.
  • The study shows that lower tax rates are associated with higher economic growth, but that higher growth is most strongly related to a lower tax compliance burden and more efficient systems.
  • The range of the three Paying Taxes indicators is narrowing in a world where globalisation is increasing.
  • Corporate income tax continues to represent only part of the tax burden on business – it accounts for only 12% of payments, 26% of time and 37% of the Total Tax Rate.  
  • Central Asia and Eastern Europe is the region that has seen most reform over the eight years of the study, with the largest fall in both time to comply (-200 hours) and number of payments (-22.2).

We hope you find this report useful. Please feel free to contact us if you need any further information or would like to discuss any of the findings from the study in more detail.