PwC Ukraine team comments on the results of Paying Taxes 2020, a joint project with the Word Bank Group

The results of the survey evaluating the ease of paying taxes in 190 countries across the globe were published on November 26. The main reason for Ukraine dropping in the ranking is the actions of other countries to automate processes and reduce the time for compliance. Another reason is the tax burden increase for businesses in our country.

The automation and simplification of tax compliance procedures have become world trends. And thanks to this some countries have substantially strengthened their positions in the rating. For example, Turkey soared from 80^th to 20^th by cancelling VAT for capital investment as well as the need to waste time waiting for the VAT refund. Hungary jumped from 86^th to 56^th by reducing the time for a tax audit due to a corporate tax return adjustment.

Countries such as Portugal, France, Poland, and Lithuania have introduced a real-time reporting function. The tax authorities are now able to review the transactions data promptly and businesses do not have to submit numerous attachments containing transaction details in addition to the tax return.

Kazakhstan launched a pilot project of deploying blockchain for administering a portion of VAT invoice data. Great Britain is also considering this opportunity. The time required to comply with VAT obligations fell significantly in Brazil and Vietnam due to the optimization of the available IT-systems.

Meanwhile, Ukraine is at the stage of preparing for further tax authority digitalization and tax compliance reform. It will take time for these changes to affect the country’s overall Paying Taxes score.

The main immediate issue, which needs to be studied carefully, is the time to comply. The average figure for Ukrainian business is 328 hours per year. And in the time to comply with VAT issues rating our country placed 176 of 190.