Paying Taxes 2013

Poyin
Toxes
2013
Tleglobulpictuie
www.pwc.com/payingtaxes
2 Paying Taxes 2013
PwC
*
John Preston
GlobulHeudolExteinulRelutions,
RegulutionundPolicyloiTux
PwC(UK)
+44(0)207804264S
joln.piestonguk.pwc.com
Andrew Packman
TotulTuxContiibutionLeudei
PwC(UK)
+44(0)189SS22104
undiew.puckmunguk.pwc.com
Neville Howlett
DiiectoiExteinulRelutions,Tux
PwC(UK)
+44(0)2072127964
neville.p.lowlettguk.pwc.com
TheWorldBonk/IFC
Augusto Lopez Claros
Diiectoi
Globul Indicutois undAnulysis.
+12024S8894S
ulopezcluiosgilc.oig
Rita Ramalho
PiogiumMunugei,DoingBusinessUnit
+12024S84139
iiumullogilc.oig
Tea Trumbic
PiivuteSectoiDevelopmentSpeciulist
+12024730S77
ttiumbicgwoildbunk.oig
Contocts
*
PwC refers to the network of member rms of PricewterhouseCoopers International Limited (PwCIL),
or, as the context requires, individual member rms of the PwC network.
3 .H\WKHPHVDQGQGLQJV
Foreword 1
.H\WKHPHVDQGQGLQJV 3
About Paying Taxes 9
Chapter 1: Findings of the World Bank and IFCs
Doing Business 2013 report 13
Chapter 2: PwC commentary 21
An economic unulysis 23
Tleglobuliesults 29
Tleiegionulunulyses:
Aliicu 41
Asiu Pucic 57
Centiul Ameiicu & Cuiibbeun 73
Centiul Asiu & Eustein Euiope 85
EU & EFTA 95
MiddleEust 109
Noitl Ameiicu 115
Soutl Ameiicu 123
Appendix 1:Metlodology 137
Appendix 2:Tledututubles 145
Contents
1 Paying Taxes 2013
Foreword
Andrew Packman
Total Tax Contribution Leader
PwC (UK)
Director, Global Indicators and
Analysis
The World Bank Group
TlePuyingTuxesindicutois(tleTotul
TuxRute,tletimetocomplyund
tlenumbeiolpuyments)luvenow
beenpuitoltleWoildBunkGioup
Doing Businesspiojectloieigltyeuis,
monitoiingtleclungesundieloims
mudetotuxiegimesuioundtlewoild.
Tlesimpleuimoltlestudyistosupply
businessleudeisundpolicymukeis
witliobustdututoenubletuxsystems
tobecompuiedonulikeloilike
busis,undtolelpinloimtlediulogue
wliclundeiliestledevelopmentol
tuxpolicy.
Tlestudyisuniqueintlutitnow
notonlycoveis18Seconomies,but
itulsopiovidesuninsigltintolow
tuxsystemsluvedevelopedoveiu
signicunt peiiod ol time, using u
consistentmetlodology.
Tlepeiiodcoveied(2004to2011)
lusbeenupuiticuluilytuibulent
one.Initiullytleiewusupeiiod
ol signicunt giowtl, lollowed by
unubiuptundseveieeconomic
downtuin.Weuienowinupeiiod
olslow,giuduul,butinconsistent
iecoveiy.Itisnotsuipiisingtleieloie
tlutwitltlisvolutileeconomic
buckdiop,tleinteiestintlepuyments
mudebybusinessundieceivedby
goveinmentslusbecomemoieintense
undwidespieud.
Intlisyeuispublicutiontleieloiewe
luvelocussedontletiendstluttle
PuyingTuxesdutuslow,botluttle
globullevel,undulsobygeogiuplicul
iegion.Globullyitisnoweusieiloi
ims to puy tuxes tlun eiglt yeuis ugo.
Botltleudministiutivebuidenund
tleuveiugetuxiutesluvedecieused
oveitlispeiiod.Tlestudiesloisome
timeluveslownutiendtowuidu
loweiingolcoipoiutetuxiutesund
ubioudeningoltletuxbuse.Inlust
yeuispublicutiontlepuceolieloim
continuedbutwitlunincieusing
locusonimpiovingtleudministiutive
uspectsoltletuxsystem.Tlis
yeuisiesultsuiemoiecomplex;
udministiutiveieloimsluvecontinued,
buttlelullinuveiugeglobultuxiutes
seemstoluvestulled;tlismuyindicute
tluttuxiutesuiestubilisingustle
piessuie on public nunces continues
togiow.
Tuxesluvelistoiicullybeenusedus
upolicyinstiumentinuvuiietyol
wuys, but witl tle continuing dilcult
economicenviionment,tletension
betweentleneedtoiuisetuxievenues
unduttlesumetimetopiovideu
systemwliclencouiugeseconomic
uctivityisincieusing.Goveinments
needtoiuiseievenuestoenuble
tlemtodiscluigetleiiobligutions
topiovidelundingloiinliustiuctuie,
educutionundpublicleultl,und
insomecusestleieisstillmuclto
do to ieduce tle signicunt public
decits wlicl peisist. Howevei, in u
woildwlicllusnowtiulyembiuced
globulisution,somegoveinmentsulso
seeuneedtoputinplucetuxsystems
wlicl uie seen to be elcient, cun
lelptouttiuctinvestment,undintuin
cun lelp lostei economic giowtl. A
sensiblebusinesstuxsystemisnotjust
uboututtiuctivetuxiutesbutulsotux
iuleswlicluiesimpleundeusyto
complywitl.
As in pievious editions ol tle Puying
Tuxespublicutionweincludeu
numbeioluiticlesliomuioundtle
woildwliclgiveluitleiinsigltson
lowgoveinmentsuieuddiessingtle
clullengingissuestluttleyluceund
some ol tle specic policies tlut tley
uieimplementing.
Weluveulsoincludedtleiesultsol
someudditionulunulysisundeituken
tlis yeui. As we now luve eiglt yeuis
olPuyingTuxesdutu,weconsideiit
sulciently iobust loi u compuiison
tobemudewitlsomebioudei
mucioeconomicindicesuioundgiowtl
undinvestment.Insomeiespectstle
iesultsuiepeilupsnotsuipiising,
coniming tlut liglei tux buidens uie
ussociutedwitlloweiinvestment;tle
moiestiikingiesultistlutieducing
tleudministiutivebuidenonbusiness
uppeuistobelinkedwitleconomic
giowtlmoiestionglytluncutting
tuxiutes.PuyingTuxessuggeststlut
udministiutiveieloimistlepiioiity
loigoveinments.
WelopetluttlePuyingTuxesstudy
continues to geneiute dutu tlut you nd
uselul,butilyouluveunycomments
oileedbuckonlowwecundevelop
tlisstudyluitleitlenwewouldbe
deligltedtoleuiliomyou.

Andrew Packman
3 Paying Taxes 2013
Key themes ond ndins
Indicutoisuttleglobullevel
267
louis
27.2
puyments
44.7%
TotulTuxRute
Onuveiugeitnowtukesouicusestudycompuny267 hours
tocomplywitlitstuxes,itmukes27.2 paymentsundpuys
unuveiugeTotulTuxRuteol44.7%.
Onuveiugeuciosstleeigltyeuisoltlestudytlecostoltux,
tleTotulTuxRute,luslullenbyulmost1%loieuclyeui;tle
timetocomplyluslullenby54 hours(sevenduys);undtle
numbeiolpuymentsluslullenby6.5.
8% 6.5 54
TotulTuxRute Timetocomply
(louis)
Numbeiol
puyments
Wliletletimetocomplyundnumbeiolpuymentsluve
continued to lull signicuntly in 2011, tle iute ol decline
loitleTotulTuxRuteslowed.TleTotulTuxRutelellby
0.3%,tlenumbeiollouislellbya dayundtlenumbeiol
puymentsbyulmost2.
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
TotulTuxRute
-0.3%
-1doy
2011
Timetocomply
-2
Numbei
olpuyments
In 2011 tle uveiuge iute ol piot tux lus iemuined ut wlile
tleiuteloilubouituxesundsociulcontiibutionsincieused
by0.1%undloiotleituxeslellby0.4%.
Lubouituxes
+0.1%
+/-0%
-0.4%
Piottuxes
Otleituxes
2011
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Totul
Tux
Rute
Coipoiuteincometuxonlypuitoltlebuiden
Time TotulTuxRute
12% 26% 36%
Puyments
Coipoiuteincometuxcontinuestoiepiesentonly
puitoltletuxbuidenonbusinessituccountsloi
only12%olpuyments,26%oltimeund36%ol
tle Totul Tux Rute. Tlis piole lus clunged veiy
littleoveitleeigltyeuisoltlestudy.
31
35
2010
Reforms
2011
Reloimscontinueuioundtlewoild.Howeveitlenumbeiol
economiesieloimingluslullenliomWKLUW\YHlustyeuito
thirty oneintlemostiecentstudy.Tlelocuscontinuestobe
onieducingtleudministiutivebuidenoltletuxsystem.
Tledistiibutionloitletimetocomplylusulsonuiiowed.
In2011132 economiesspentbetween101 and 350 hours
ontleiituxcompliunceloitlecusestudycompunycompuied
witl105 of the economiesin2004.
2004
105economies
2011
132economies
101
-350
louis
2004
93economies
2011
116economies
Totol ToxRote
between
26-50%
TleiungeolTotulTuxRutesupplieduioundtlewoildlus
nuiiowed.116 economiesintlestudynowluveuiute
between26 and 50%compuiedto93 economiesin2004.
All tliee puying tuxes indicutois luve
lullenconsistentlyoveitlepeiiodol
tle study ieecting tle ieloims tlut
goveinmentsluveimplementedwitl
uviewtomukingpuyingtuxeseusiei
undsoeusingtlebuidenloibusiness
undgoveinment.
Notsuipiisinglyinuwoildinwlicl
globulisutionisbeingembiucedund
compuiisonsuiemoieeusilymude
witlgeogiuplicneiglbouisund
economicpeeis,tleiungeoltle
indicutoisisnuiiowingsuggesting
ugiuduulmovetowlutmuybe
peiceivedusbeingsustuinuble.
Tlelucttluttlecompliunce
indicutois(tlenumbeiollouis
undpuyments)continuetolull
signicuntly, suggests tlut tleie
isstillscopeloiimpiovementin
munyeconomiesuioundtlewoild,
undtluttlevulueolmukingsucl
impiovementsisundeistood.
Howevei,tleieductionintleTotul
Tux Rute lus slowed ieecting tle
needloigoveinmentstodeulwitl
dilleienteconomicscenuiiosund
ciicumstunceswliclluveuiisenin
tlewukeoltleeconomicdowntuin,
undtouseuvuiietyolpolicyoptions
wlicltleyluveuttleiidisposul.
Tlestudycontinuestoslowtlut
coipoiuteincometuxisonlypuit
oltlepictuiewlenlookinguttle
contiibutionmudebybusinessto
public nunces. Tlis is impoitunt loi
goveinmentswlenconsideiingtle
ieloimswliclitleelsuienecessuiy
loi tle tux system. And loi compunies
tleclullengeistoluveubettei
undeistundingoltlelullextentol
tleiicontiibutiontotleeconomy
inwlicltleyopeiuteundunubility
toimpiovetlewuyinwlicltley
communicuteontux.
5
Hihest
totultuxiute
Efcient
tuxsystems
Lowest
puyments
Hih
numbeiol
puyments
Hihest
louis
Compliuncecontinuesto
tukelongestinSoutlAmeiicu
(619louis)undtleleust
umountoltimeisspentin
tleMiddleEust(1S8louis).
Tlislusbeentleposition
consistentlytliougltle
eigltyeuisoltlestudy.
CentiulAsiu&EusteinEuiopelus
beentlebiggestieloimeioveitle
eigltyeuisoltlestudy.Economies
intlisiegionluveslowntle
luigestlullinbotltletimeto
comply(200louis)undnumbei
olpuyments(22.2)undupuitliom
tleMiddleEustluvetleluigest
lullintleTotulTuxRute(12.6%).
Tleliglestnumbeiol
puymentsisnowmudein
Aliicu(37.0)undtlelowestin
NoitlAmeiicu(8.3)lollowed
bytleEU&EFTA
1
(12.8).
* The regional classications are different from those used in the World Bank/IFC Doing Business report. For a list of economies in each region please refer to
the regional analyses which begin on page 41
1
European Union & European Free Trade Association (EU & EFTA)
Tleiegionulpictuie
Below
tleglobul
uveiuges
Biest
ieloimei
Leost
demondin
tuxsystems
Tle2013studyslowstluttle
MiddleEusteinstutesluvetle
leustdemundingtuxsystemsloioui
domesticcusestudycompuny.Tley
luvetlelowestuveiugeTotulTux
Rutes(23.6%),tlelowesttimeto
comply(1S8louis),buttle
puymentsindicutoi(17.6)suggests
tlutimpiovementsuiestillpossible
loielectioniclingundpuyment.
TleMiddleEustlusludtlelowest
TotulTuxRutesundAliiculustle
liglesttliouglouttleeigltyeuisol
tlestudy.Tleeliminutionoltle
cuscudingsulestuxiegimesis
impiovingAliicusposition.Tlislus
ulsolelpedieducetleglobuluveiuge
ulongwitlluigelullsintleiutes
uppliedinCentiulAsiu&Eustein
Euiope,undtleMiddleEust.
Itisnotsuipiisingtluttle
economiesintleMiddleEust
leutuiesopiominentlyintletop
juiisdictionsoltlePuyingTuxes
indicutois.Tliscunluigelybe
uttiibutedtotleielutivelylewtuxes
leviedontlecusestudycompuny
unduieliunceonotleisouices
olgoveinmentievenues.Tle
expectutionistluttliswillclunge
usnewievenueiuisingmeusuies
uieintioduced.
Tle economies in Centiul Asiu
& Eustein Euiope luve led tle
cluigeoveitlepeiiodoltlestudy
toimpiovetleiituxcompliunce
pioceduiesundulsotoieducetleii
tuxiutes.
Wlile tle Totul Tux Rutes loi Aliicu
stilluppeuitobeligl,iltletliee
countiieswitlcuscudingsules
tuxesuieexcludedtlentleuveiuge
lullstoulevelwliclisjustubove
tlewoilduveiuge,leuvingSoutl
Ameiicu us tle iegion witl tle
liglest Totul TuxRutes.
Soutl Ameiicu is ulso tle iegion
wlicldemonstiutestleleuviest
compliuncebuideninteimsoltle
louistocomply.Tlisisdiivenby
umixolcomplicutedtuxsystems,
iegimeswliclluvemultiplelevels
olgoveinmentundtuxuutloiities,
undwleieieguluiclungestotle
tuxsystemuiecommon.
Tledevelopedeconomiesol
Euiope und Noitl Ameiicu not
suipiisingly luve tle most elcient
tuxsystemsbutTotulTuxRutescun
beligl,diiveninmunycusesby
numeiouslubouituxesundsociul
contiibutions.
Tle Asiu Pucic economies tend to
luveTotulTuxRutestlutuiebelow
tlewoilduveiugeundtleyluve
continuedtolullustleylookto
competeintlewoildeconomy.
7 Paying Taxes 2013
A compuiison ol tle Totul Tux Rute indicutoi witl GDP und
FDI suggests tlut liglei Totul Tux Rutes loi business uie
ussociutedwitlieducedubilityloiuneconomytogiowund
uttiuctinwuidinvestment.
Compuiingtlecompliunceindicutoisloitletimetocomply
undtlenumbeiolpuymentswitlGDPsuggeststlutu
liglleveloludministiutivecomplexityintletuxsystem
isussociutedwitllesseconomicgiowtl,undtougieutei
degieetluntletuxcosttlisispuiticuluilytlecusein
ielutiontotlenumbeiolpuymentsindicutoi,implyingtlut
u ligl numbei ol tuxes, und u luck ol electionic ling und
puyment lucilities uie key ieusonsleie.
TotolTox
Rote
Inword
investment
GDP
rowth
Tox
Administrotive
complexity
GDP
rowth
Someeconomicinsiglts
TleeconomicunulysistocompuietlePuyingTuxes
indicutoiswitlGiossDomesticPioduct(GDP)und
Foieign Diiect Investment (FDI) suggests tlut wlile
ligleibusinesstuxutioncunbelinkedtoslowei
economicgiowtlundinteinutionulinvestment,
ieducingtleudministiutivebuidenundcomplexity
oltletuxsystemcunpotentiullybelinkedtougieutei
clungeinoveiullgiowtl.Tleimplicutionistlut
minimisingtletimeundelloitwliclbusinessesneed
tospendoncomplyingwitltletuxsystemisequully
impoituntloigoveinmentswlenconsideiinglowbest
tostimuluteundsustuineconomicgiowtl.
Ineconomieswleieuctionwustukentoieducecomplexity
intuxudministiutionbotlinteimsoltlenumbeiol
puymentsundtletimetukentodeulwitltuxmutteis
tleielusbeenupositiveclungeoneconomicgiowtl.
GDP
rowth
Toxodministrotive
complexity
9 Paying Taxes 2013
Puyingtuxisimpoitunt.Tuxespiovidegoveinmentwitl
ievenues,undtlosewlopuytlemluveustukeintlesystem
undinlowgoveinmentspendsitsmoney.Inviewoltlecuiient
globuleconomicclimute,munygoveinmentsspendingundtux
policies uie now constiuined by tle need loi decit ieduction to
muintuin tle condence ol nunciul muikets, but tleie is ulso u
need to stiike u bulunce wlen setting scul policy. Tux systems
cunulsocontiibutetouneconomicenviionmenttlutisuttiuctive
loiinwuidinvestmentundwliclcunlelpdomesticbusinessesto
giow. Foi developing economies, tle globul economic downtuin
luscieutedunudditionulissuetouddiessustleuidbudgets
oldevelopedeconomiesluvebeencut.Goveinmentsintlese
countiiesneedtoconsideilowtleycunieplucetlislunding.
Lookingutlowtleycunimpiovetleiituxsystemssotluttley
uie cupuble ol geneiuting u moie sustuinuble souice ol nuncing
tlundebtoiuidisliglontleugendu.Tlepiessuieliom
goveinmentsloituxuutloiitiestogeneiuteligleituxievenues
islikelytocontinuetoincieuse.
AboutPoyinToxes
ondthisreport
10 $ERXW3D\LQJ7D[HV
11 Paying Taxes 2013
TlePuyingTuxesstudylooksuttux
systemsliomtlebusinesspeispective.
Businesspluysunessentiuliolein
contiibutingtoeconomicgiowtlund
piospeiitybyemployingwoikeis,
impiovingtleskillsundknowledge
buse,buyingliomloculsupplieisund
piovidingulloidublepioductstlut
impiovepeopleslives.Businessulso
puys und geneiutes muny tuxes. As
well us coipoiute income tux on piots,
businesspuysemploymenttuxes,
sociulcontiibutions,indiiecttuxes,
piopeitytuxesunduwlolevuiietyol
smulleituxesincludingenviionmentul
tuxes.TlePuyingTuxesstudyslows
tlutcoipoiuteincometuxisleviedon
businessin179economies,vulueudded
tux (VAT) is collected by business in
1S4economies,unduiungeolluboui
tuxesundsociulcontiibutionsisboine
undcollectedbybusinessin184
economies.Tuxesboineundcollected
bybusinessuietleieloieimpoitunt
undtleimpucttluttlesetuxesund
tletuxsystemsusedtogeneiutetlem
luveonbusinessisulsoimpoituntbotl
inteimsoltleiidiiectcost,undin
teimsoltlecompliuncecoststluttley
imposeonbusinessusununpuidtux
collectoiloigoveinment.
PuyingTuxesisuuniquestudy.It
piovidesdutuontuxsystemsuiound
tlewoildwitlunubilitytomonitoi
tuxieloim,undnowoveiuneiglt
yeuipeiiod.Itisuniquebecuuseit
geneiutesusetolindicutoistlut
meusuietlewoildstuxsystemsliom
tlepointolviewolbusinessundulso
becuuseitcoveistlelulliungeoltuxes
puidin18Seconomies,meusuiing
lowbusinesscomplieswitltle
dilleienttuxluwsundiegulutionsin
eucleconomy.
TlisistleeigltlyeuitluttlePuying
Tuxesindicutoisluvebeenincluded
intleDoing Businesspiojectiunby
tleWoildBunkGioup.Tleindicutois
meusuietleeuseolPuyingTuxesloi
usmulltomediumsizeddomestic
compuny,inulloltle18Seconomies
tlutitcoveis.
Tleobjectivesoltlestudyuie:
topiovidedutuwliclcunbe
compuiedbetweeneconomiesonu
likeloilikebusis;
tolucilitutetlebenclmuiking
oltuxsystemswitlinielevunt
economicundgeogiuplicul
gioupings,wliclcunpiovideun
oppoitunitytoleuinliompeei
gioupeconomies;
toenubleunin-deptlunulysisoltle
iesultswliclcunbeusedtolelp
identilygoodpiucticesundpossible
ieloims,und
togeneiuteiobustdutuontux
systemsuioundtlewoild,
includinglowtleyluveclunged,
wliclcunbeusedtoinloimtle
developmentolgoodtuxpolicy.
PuyingTuxesusesucusestudyscenuiio
tomeusuietletuxesundcontiibutions
puidbyustunduidisedbusiness
undtlecomplexityoluneconomys
tuxcompliuncesystem.Tliscuse
study scenuiio uses u set ol nunciul
stutementsundussumptionsubout
tiunsuctionsmudeoveitleyeui.Tux
expeitsliomunumbeioldilleient
ims in eucl economy (including
PwC),computetletuxesund
mundutoiycontiibutionsdueintleii
juiisdiction,busedontlestunduidised
cusestudylucts.Inloimutionisulso
compiled on tle liequency ol ling
undpuyments,uswellustletime
tukentocomplywitltuxluwsinun
economy.Tlecusestudycompunyis
notintendedtobeuiepiesentutive
compuny,butlusbeenconstiuctedto
lucilituteucompuiisonoltlewoilds
tuxsystemsonulikeloilikebusis.
PuyingTuxescoveisbotltlecostoltle
tuxeswlicluieboinebytlecusestudy
compuny,undulsotleudministiutive
buidenoltletuxestluttlecompuny
beuisundtletuxestlutitcollectson
belullolgoveinment(butwlicldo
notluveunimpuctontlecompunys
iesults).Botltletuxcostundtletux
compliuncebuidenuieimpoitunt
liomtlebusinesspointolviewund
tleseuiemeusuiedusingtliee
sub-indicutois:
TotulTuxRute,(tlecostolull
tuxesboine);
timeneededtocomplywitltle
mujoi tuxes (piot tuxes, luboui
tuxesundmundutoiycontiibutions,
undconsumptiontuxes);und
tlenumbeioltuxpuyments.
Tle Woild Bunk /IFC Doing Business
piojectculculutesunoveiulliunking
loitleeuseolpuyingtuxeswlicl
isusimpleuveiugeoltlepeicentile
iunkingsoneucloltlesubindicutois
witluloweitlieslolduppliedto
tleTotulTuxRute.Tletliesloldis
dened us tle liglest Totul Tux Rute
umongtle1S%oleconomieswitl
tlelowestiutes.Tleiesultsloieucl
sub-indicutoi,splitbytypeoltux,
uie included in Appendix 2 ol tlis
publicutionulongwitltleoveiull
euse ol Puying Tuxes iunking. Fuitlei
detuilsuieulsouvuilubleontleDoing
BusinessundtlePwCwebsites.
2
Tle
lullmetlodologyloitlecusestudy
compunyundtleindicutoisuieulso
setoutontlesewebsitesundsome
exumplesollowtleindicutoisuie
culculuted uie included in Appendix 1
oltlispublicution.
Cluptei1oltlispublicutionsets
outtlisyeuispeispectiveliomtle
WoildBunk.
Itlooksutwleiepuyingtuxesiseusy
undwleienot,tleieloimstlutweie
mudein2011/2012,undsomeinsiglts
leuinedliomtleeigltyeuisoldutu
Cluptei2piovidesuluitleiunulysis
byPwC.
Tlisyeuitleunulysisbeginsby
compuiingtlePuyingTuxesindicutois
witlsomekeymucioeconomic
meusuies.Ittlentukesulookuttle
globuliesultsloitlisyeuisstudyund
ucompuiisonoltleiesultsuiound
tlewoildbygeogiupliculiegion.
Tleclupteigoesontotukeudetuiled
lookuttleglobultiendsoveitleeiglt
yeuisoltlePuyingTuxesstudyloi
eucloltlesub-indicutois,unduguin
compuiestlemovementsineucloltle
geogiupliculiegions.
2
www.doingbusiness.org and www.pwc.com/paying taxes
12 $ERXW3D\LQJ7D[HV
Eucliegionistlenlookedutindetuil.
Tlis coveis tle tux piole loi tle
iegionundtleeconomieswitlineucl
iegion,ucompuiisonloieucloltle
sub-indicutoisundulsoloweuclol
tleselusclungedloitlutiegionwitl
ulocusontlesomeoltleeconomies
wliclluvediiventlosemovements.
A selection ol commentuiies liom
u numbei ol PwC olces uiound
tlewoildisincludedineucloltle
iegionulsections.Tleselookuttle
iesultsolPuyingTuxesloitleii
puiticuluieconomyinmoiedetuil
illustiutinglowtledutuisbeingused
inpiucticetoinloimundstimulute
discussionwitlgoveinmentsund,tley
ulsoieleitosomeoltleieloimstlut
luvebeenunduiebeingimplemented
touddiesstleissuesuiisingin
sucldiulogues.
13 Paying Taxes 2013. World Bank and IFC commentary
Jeun-Buptiste Colbeit, Fiencl plilosoplei und Ministei
ol Finunce to King Louis XIV, once iemuiked tlut the
art of taxation consists in so plucking the goose as to
obtain the largest possible amount of feathers with the
smallest possible amount of hissing.Howtuxesuie
collectedundpuidlusclungedugieutdeulsincetlen.
Butgoveinmentsstilllucetleclullengeolmuximising
ievenue collection wlile minimisingdistoitions.
Findinsofthe
WorldBonkond
IFCsDoinBusiness
2013report
Cluptei1
14 )LQGLQJVRIWKH:RUOG%DQNDQG,)&pVDoing Business 2013 report
Fiims in tle United Aiub Emiiutes
lucetleligltestudministiutive
buideninPuyingTuxes.Tley
mustmukeonlylouipuymentsu
yeuiundspend12louisdoingso.
Fiom June 2011 to June 2012
Doing Businessiecoided31
ieloimsmukingiteusieiundless
costlyloicompuniestocomply
witltuxes.
Libeiiumudetlebiggest
impiovementintleeuseolpuying
tuxes in tle pustyeui.
Beluiuslusudvuncedtlemost
towuidtleliontieiiniegulutoiy
piucticeinPuyingTuxes
since2004.
Tlemostcommonleutuieoltux
ieloimsintlepusteigltyeuis
wus to ieduce piot tux iutes,
oltenintlecontextolpuiullel
elloitstoimpiovetuxcompliunce.
Butintlepusttwoyeuismoie
economieslocusedonintioducing
electionicsystems.
Among iegions, Eustein Euiope
& Centiul Asiu lud tle biggest
impiovementintleeuseolPuying
Tuxesintlepusteigltyeuis.
For more information on good practices and research related to Paying Taxes, visit
http://www.doingbusiness.org/data/exploretopics/paying-taxes.
Figure 1.1: Where is Paying Taxes easy and where not?
Economy Overall rank Most difcult Rank
United Arab Emirates 1 Cameroon 176
Qatar 2 Mauritania 177
Saudi Arabia 3 Senegal 178
Hong Kong SAR, China 4 Gambia, The 179
Singapore 5 Bolivia 180
Ireland 6 Central African Republic 181
Bahrain 7 Congo, Rep. 182
Canada 8 Guinea 183
Kiribati 9 Chad 184
Oman 10 Venezuela, RB 185
Figure 1.2: Who made Paying Taxes easier and lowered the tax burden in 2011/12
and what did they do?
Feature Economies Some highlights
Introduced or
enhanced electronic
systems
Albania; Belarus; Bosnia and
Herzegovina; Costa Rica;
Czech Republic; Georgia;
Germany; Kenya; Panama;
Russian Federation; Saudi
Arabia; Slovak Republic;
Slovenia; Ukraine; United Arab
Emirates; Uruguay
Ukraine introduced an online ling
and payment system and made its
use mandatory for medium-size
and large enterprises.
Reduced prot tax
rate by 2 percentage
points or more
Belarus; Brunei Darussalam;
Fiji; Japan; Republic of Korea;
Lao PDR; Liberia; Mali; Puerto
Rico (U.S.); Slovenia; Thailand;
United Kingdom
The United Kingdom reduced 2
corporate income tax rates: the
main rate from 28% to 26% and
the small-company rate from 21%
to 20%.
Merged or eliminated
taxes other than
prottax
Albania; Hungary; Liberia Liberia abolished the turnover tax.
Simplied tax
compliance process
Jamaica; Mali; Panama;
Poland
Jamaica introduced joint ling and
payment of all ve types of social
security contributions that rms
must make.
Reduced labour
taxes and mandatory
contributions
Croatia Croatia made Paying Taxes less
costly by reducing health insurance
contributions.
Introduced change in
cascading sales tax
Swaziland Swaziland introduced value added
tax to replace its cascading
salestax.
Note: Rankings are the average of the economys rankings on the number of payments, time and Total
Tax Rate, with a threshold imposed on the Total Tax Rate.
Source: Doing Business database.
Doing Businessiecoidstletuxes
undmundutoiycontiibutionstlut
umedium-sizecompunymustpuy
inugivenyeuiundulsomeusuies
tleudministiutivebuidenolPuying
Tuxesundcontiibutions.Itdoestlis
witltlieeindicutois:numbeiol
puyments,timeundTotulTuxRuteloi
tleDoing Business cuse study im.
Tlenumbeiolpuymentsindicutestle
liequencywitlwlicltlecompuny
lus to le und puy dilleient types
oltuxesundcontiibutions,udjusted
loi tle wuy in wlicl tlose lings
undpuymentsuiemude.
3
Tletime
indicutoicuptuiestlenumbeiollouis
it tukes to piepuie, le und puy tliee
mujoi types ol tuxes: piot tuxes,
consumptiontuxes,undlubouituxes
undmundutoiycontiibutions.Tle
TotulTuxRutemeusuiestletuxcost
(us u peicentuge ol piot) boine by tle
stunduid im. Tle indicutois do not
meusuie tle scul leultl ol economies,
tlemucioeconomicconditionsundei
wliclgoveinmentscollectievenue
oitlepiovisionolpublicseivices
suppoitedbytuxution.Tleiunkingon
tleeuseolPuyingTuxesistlesimple
uveiugeoltlepeicentileiunkings
onitscomponentindicutois,witlu
tlieslolduppliedtotleTotulTuxRute
(Figuie 1.1).
3
WhoreformedinPoyinToxesin
2011/12?
Fiom June 2011 to June 2012 Doing
Businessiecoided31ieloimsmuking
it eusiei oi less costly loi ims to puy
tuxes (Figuie 1.2). Sixteen economies
mundutedoienluncedelectionic
ling, eliminuting tle need loi 196
sepuiutetuxpuymentsundieducing
compliuncetimeby134duys
(1,070louis)intotul.InUiuguuy
smullundmedium-sizecompuniescun
now le und puy coipoiute income tux,
vulueuddedtuxundcupitultuxonline.
3
Companies sometimes prefer more frequent payments, to smooth cash ow, and less frequent ling.
4
The threshold is set at the 15th percentile of the Total Tax Rate distribution, and this year is 25.7%. All economies with a Total Tax Rate below this level receive
the same percentile ranking on this component. The threshold is not based on any economic theory of an optimal tax rate that minimises distortions or
maximises efciency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied
on medium-size enterprises in the manufacturing sector as observed through the Paying Taxes indicators. This reduces the bias in the indicators toward
economies that do not need to levy signicant taxes on companies like the Doing Business standardised case study company because they raise public
revenue in other waysfor example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of
which are outside the scope of the methodology).
Figure 1.3: Who makes Paying Taxes easy and who does not and where is the Total
Tax Rate highest?
Payments (number per year)
Fewest Most
Hong Kong SAR, China 3 Antigua and Barbuda 57
Saudi Arabia 3 Guinea 58
Norway 4 Senegal 59
Qatar 4 Panama 60
Sweden 4 Congo, Rep. 61
United Arab Emirates 4 Sri Lanka 61
Georgia 5 Cte d'Ivoire 62
Singapore 5 Serbia 66
Chile 6 Tajikistan 69
Malta 6 Venezuela, RB 71
Time (hours per year)
Fastest Slowest
United Arab Emirates 12 Cameroon 654
Bahrain 36 Ecuador 654
Qatar 48 Senegal 666
Bahamas, The 58 Mauritania 696
Luxembourg 59 Chad 732
Oman 62 Venezuela, RB 792
Switzerland 63 Vietnam 872
Saudi Arabia 72 Nigeria 956
Seychelles 76 Bolivia 1,025
Hong Kong SAR, China 78 Brazil 2,600
Total Tax Rate (% of prot)
Highest
Colombia 74.4
Palau 75.7
Bolivia 83.4
Tajikistan 84.5
Eritrea 84.5
Uzbekistan 98.5
Argentina 108.3
a

Comoros 217.9
a

Gambia, The 283.5
a

Congo, Dem. Rep. 339.7
a

Note: The indicator on payments is adjusted for the possibility of electronic or joint ling and payment
when used by the majority of rms in an economy.
a
As a result of assumptions about the prot margin used to standardize the nancial statements of
the case study company, in four economies the amount of taxes due would exceed the prot of the
company. To be able to comply with its tax obligations in these economies, the company would
therefore have to charge more for its products and generate a higher prot. The methodology does not
allow for price adjustments and assumes a standard cost markup of 120%.
Tlisoptionwusuvuilubleonlyloiluige
tuxpuyeisuntil2011.Sevenotlei
economiesimplementedelectionic
ling loi tle ist time, iuising tle
numbeiolleiingtlisoptionliom
67in2010to74in2011.
S
Tlunksto
impiovementsinelectionicsystems
loi ling und puying sociul secuiity
contiibutions, Suudi Aiubiu tlis yeui
iunksumongtle10economieswitl
tlelewestpuymentsundlowesttux
compliunce time (Figuie 1.3).
Electionic systems loi ling und Puying
Tuxeseliminuteexcessivepupeiwoik
und inteiuction witl tux olceis. Tley
cunieducetletimebusinessesspend
oncomplyingwitltuxluws,incieuse
tuxcompliunceundieducetlecostol
ievenueudministiution.
6
Butuclieving
tleseiesultsiequiiesellective
implementutionundligl-quulity
secuiitysystems.
Twelve economies ieduced piot tux
iutesin2011/12:sixligl-income
economies(BiuneiDuiussulum,Jupun,
Koieu,PueitoRico[teiiitoiyoltle
UnitedStutes|,SloveniuundtleUnited
Kingdom),louimiddle-incomeones
(Beluius, Fiji, Luo PDR und Tluilund)
undtwolow-incomeones(Libeiiuund
Muli). Reductions in piot tux iutes uie
oltencombinedwitlelloitstowiden
tletuxbusebyiemovingexemptions
undwitlincieusesintleiutesol
otleituxes,suclusvulueuddedtux
(VAT). Libeiiu impioved tle most in
tleeuseolPuyingTuxes.Itieducedtle
coipoiuteincometuxiuteliom3S%to
2S%undubolisledtletuinoveitux.
TleTotulTuxRutelellliom43.7%ol
piot to 27.4%.
Eleveneconomiesintioducednew
tuxes(Cumbodiu,CostuRicu,Cypius,
ElSulvudoi,Etliopiu,Jupun,Muluwi,
Muldives,Muli,Nigeiiu,undRepublicu
BolivuiiunudeVenezuelu).Otleis
incieused piot oi income tux iutes
(Botswunu,tleDominicunRepublic
undMoldovu)
7
oisociulsecuiity
contiibutions(HunguiyundPolund).
5
One of the economies added to the sample in this years report, Malta, has offered electronic ling for several years and so is included in the count for 2010.
6
Mexico, for example, has relied heavily on technology and the use of electronic systems to lessen the administrative burden for taxpayers. These efforts
simplied requirements for rms, reducing the number of annual tax payments recorded by Doing Business from 27 in 2007 to 6 in 2011 and the time to
comply with major taxes from 549 hours to 337.
7
At the same time Moldova reduced the withholding tax for dividends from 15% to 6% and lowered the withholding tax for payments other than dividends
from 15% to 12%. In addition, it introduced a new tax regime for small and medium-size enterprises under which small companies pay a single tax of 3% of
revenues from operational activities.
Whothoveweleornedfromeiht
yeorsofdoto?
Since200SDoing Businesslus
iecoided296tuxieloimsin142
economies (Figuie 1.4). Some ol tlese
ieloims intioduced online ling, udded
in29economiesintlepusteiglt
yeuis.Tleseundotleiimpiovements
tosimplilytuxcompliunceieduced
tletimeiequiiedtocomplywitltle
tliee mujoi tuxes meusuied (piot,
lubouiundconsumptiontuxes)byS4
louisonuveiuge,undtlenumbeiol
puymentsby 7 (iounded).
Eustein Euiope und Centiul Asiu lud
tlebiggestimpiovement,witltletime
ieducedby181louisundtlenumbei
ol puyments by 24 (Figuie 1.S).
Uppei-middle-incomeeconomiesluve
udvuncedtlemosttowuidtleliontiei
iniegulutoiypiucticeinPuyingTuxes,
lollowedbylowei-middle-income
economies (Figuie 1.6).
Besideslesseningtleudministiutive
buidenoltuxes,munyeconomiesulso
ieducedtuxiutes,oltenliomielutively
ligllevelsundwitlcomplementuiy
elloitstoimpiovetuxcompliunce.
Sub-Suluiun Aliicu lud tle luigest
ieductionintleTotulTuxRute,13.3
peicentugepointsonuveiugesince
200S.Someoltlisieductioncume
liom tle intioduction ol VAT, wlicl
ieplucedtlecuscudingsulestux.
8
Buiundi,Djibouti,Mozumbique,Sieiiu
LeoneundSwuzilundullintioduced
VAT systems. In Sieiiu Leone tux
ievenueiemuinedielutivelystubleus
upeicentugeolGDP,iisingonlyliom
10.8%in200Sto11%in2009.Buttle
sluieolievenuecomingliomtuxes
ongoodsundseivicesincieusedliom
11.9%to24.6%.
9
Figure 1.4: Tax reforms implemented by more than 75% of economies in the past eight years
Number of Doing Business reforms making it easier to pay taxes by Doing Business report year
Figure 1.5: Tax compliance simplied the most in Eastern Europe and Central Asia
Average payments (number per year)
South Asia (8 economies)
Middle East & North Africa (19 economies)
East Asia & Pacic (24 economies)
Latin America & Caribbean (33 economies)
Sub-Saharan Africa (46 economies)
OECD high income (31 economies)
Eastern Europe & Central Asia (24 economies)
Doing Business 2006
Doing Business 2007
Doing Business 2008
Doing Business 2009
Doing Business 2010
Doing Business 2011
Doing Business 2012
Doing Business 2013
4 2 1 1 2 10
1 4 3 2 6 2 3 2 23
3 5 9 8 4 29
4 5 5 8 6 2 7 5 42
3 8 8 6 11 11 7 4 58
9 7 6 8 9 7 7 9 62
8 11 10 9 9 11 7 7 72
OECD high income (31 economies)
Middle East & North Africa (19 economies)
East Asia & Pacic (24 economies)
Eastern Europe & Central Asia (24 economies)
South Asia (8 economies)
Latin America & Caribbean (33 economies)
Sub-Saharan Africa (46 economies)
DB2013
DB2006
DB2013
DB2006
DB2013
DB2006
DB2013
DB2006
DB2013
DB2006
DB2013
DB2006
DB2013
DB2006
1 2 8 12
2 5 8 16
2 11 8 21
2 13 9 25
4 11 10 25
4 13 12 29
4 8 16 28
8 19 25 52
3 13 13 30
3 12 15 30
4 11 15 31
5 17 18 40
4 16 19 39
4 16 20 40
Corporate income tax
Labour taxes
Consumption taxes
Note: An economy can be considered to have only one Doing Business reform per topic and year. The
data sample for DB2006 (2004) includes 174 economies. The sample for DB2013 (2011) also includes
The Bahamas, Bahrain, Barbados, Brunei Darussalam, Cyprus, Kosovo, Liberia, Luxembourg, Malta,
Montenegro and Qatar, for a total of 185 economies.
Note: To ensure an accurate comparison, the gure shows data for the same sample of 174 economies
for both DB2006 (2004) and DB2013 (2011) and uses regional classifcations that apply in 2012. The
economies added to the Doing Business sample after 2004 and therefore excluded here are the
Bahamas, Bahrain, Barbados, Brunei Darussalam, Cyprus, Kosovo, Liberia, Luxembourg, Malta,
Montenegro and Qatar. DB2006 data are adjusted for any data revisions and changes in methodology.
8
VAT is collected by the rm and its cost is fully passed on to the consumer. Because the rm has to make the payments and spend time lling out the returns,
VAT is included in the indicators on payments and time. But the amount of VAT paid is not included in the Total Tax Rate. Cascading sales tax, which is paid at
every point of the supply chain, is included in the Total Tax Rate, because the rm cannot deduct the sales tax it pays on its supplies from the amount it owes
on its sales. Economies introducing VAT regimes to replace the sales tax regime have therefore seen a reduction in their Total Tax Rate.
9
World Bank, World Development Indicators database, http://data.worldbank.org/.
Muny Aliicun economies ulso ieduced
piot tux iutes in tle pust eiglt yeuis,
ieducing tle sluie ol piot tuxes in
tleTotulTuxRuteby0.9peicentuge
pointonuveiugeintleiegion.Buttle
biggestieductionintlissluieoccuiied
inOECDligl-incomeeconomies,
wleieitlellby4.1peicentugepoints
onuveiuge.Oveitlesumepeiiod
tuxievenueincieusedsligltlyusu
peicentugeolGDPinSub-Suluiun
Aliicu und iemuined ielutively stuble in
OECDligl-incomeeconomies.
10
Suclieloimsluveludpositiveellects.
Mutclingtledutuuvuilublesince200S
onTotulTuxRuteswitlinvestment
dutuindicutestlutuieductionol1
peicentugepointintleTotulTuxRute
islinkedtounincieuseininvestment
equivulentto1%olGDP.
11
Figure 1.6: Middle-income economies have advanced the most toward the frontier in Paying Taxes
80
60
40
20
0
Average distance to frontier (%)
Low income Lower middle income Upper middle income High income
2011
2004
Note: The distance to frontier measure shows how far on average an economy is from the best
performance achieved by any economy onthe Paying Taxes indicators since 2004. The measure is
normalised to range between 0 and 100, with 100 representing the best performance (the frontier). The
data refer to the 174 economies included inDoing Business2006(2004). Eleven economies were added
in subsequent years. The gure shows data for the nancial years 2004 (measured by the Paying Taxes
indicators inDoing Business2006)and 2011 (measured inDoing Business 2013).
10
World Bank, World Development Indicators database, http://data.worldbank.org/.
11
The analysis controls for government consumption, institutional quality and corruption perception. It also controls for total trade openness and rents from
natural resources. Eifert, Benjamin. 2009. Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data, 200307.
Working Paper 159, Center for Global Development, Washington, DC. Djankov, Simeon, Caralee McLiesh and Rita Ramalho. 2006. Regulation and Growth.
Economics Letters 92 (3): 395401.
Since2004tleielusbeenu
conveigenceinbusinessiegulutoiy
piucticesinPuyingTuxes.Tlismeuns
tlutluws,iegulutionsundcompliunce
pioceduiesuiemoiesimiluiucioss
economiestoduytluntleyweieeiglt
yeuisugo.Tlegieutestconveigence
iniegulutoiypiucticelusoccuiied
in time. Among tle 174 economies
coveiedbyDoing Businesssince2004,
tletimetocomplywitltuxesintlut
yeuiuveiuges681louisintlewoist
quuitileoltleeconomiesusiunkedby
peiloimunceontlisindicutoi,wlileit
uveiuged211louisloitleiest
(Figuie 1.7). Since tlen tle uveiuge
timeloitlewoistquuitileluslullento
497louis,gettingcloseitotleuveiuge
ol201louisloitleiest.
Figure 1.7: Strong convergence across economies since 2004 averages by quartile
Note: Economies are ranked in quartiles by performance in 2004 on the ease of Paying Taxes. The data
refer to the 174 economies included in Doing Business 2006 (2004). Eleven economies were added in
subsequent years.
700
600
500
400
300
200
100
0
Worst
quartile
Best 3
quartiles
Time to pay taxes (hours per year)
2004 2005 2006 2007 2008 2009 2010 2011
70
60
50
40
30
20
10
0
Worst
quartile
Best 3
quartiles
Payments (number)
2004 2005 2006 2007 2008 2009 2010 2011
100
80
60
40
20
0
Worst
quartile
Best 3
quartiles
Total Tax Rate (in % of prot)
2004 2005 2006 2007 2008 2009 2010 2011
Figure 1.8: Who has narrowed the distance to frontier in Paying Taxes between 2004 and 2011?
Most improved Change in distance to frontier (percentage points)
Belarus 61 (0 -> 61)
Georgia 47 (39 -> 86)
Colombia 47 (13 -> 60)
China 42 (19 -> 61)
Azerbaijan 37 (38 -> 75)
Ukraine 31 (16 -> 47)
Sierra Leone 30 (34 -> 64)
Argentina 30 (14 -> 44)
Yemen, Rep. 30 (33 -> 63)
Uruguay 30 (31 -> 61)
Note: The distance to frontier measure shows how far on average an economy is from the best
performance achieved by any economy onthe Paying Taxes indicators since 2004. The measure is
normalised to range between 0 and 100, with 100 representing the best performance (the frontier). The
data refer to the 174 economies included in Doing Business 2006 (2004). Eleven economies were added
in subsequent years. The rst column lists the top 10 most improved economies in order; the second
shows the absolute improvement in the distance to frontier between nancial years 2004 and 2011.
Figure 1.9: Broad tax reform in Belarus reduces payments, time and Total Tax Rate
2004 2005 2006 2007 2008 2009 2010 2011
200
160
120
80
40
0
1000
800
600
400
200
0
Total Tax Rate
Payments
Time
Time (Hours)
Beluiuslusudvuncedtleluitlest
towuidtleliontieiiniegulutoiy
piucticeinPuyingTuxessince2004
(Figuie 1.8). Embuiking on un
umbitioustuxieloimin200S,Beluius
ubolisledseveiultuxes,ieduced
tuxiutes,bioudenedtletuxbuse,
simplied ling loims und tle tux luw
undinvestedinelectionicsystemstlut
muke it eusiei to le und puy tuxes.
Tleseclungesieducedtlenumbei
olunnuulpuymentsliom12Sto10,
tletimeliom987louisuyeuito338
undtleTotulTuxRuteliom137.S%ol
piot to 60.7% (Figuie 1.9). Tle elloits
tomuketuxcompliunceeusieiundless
costlyuiepuyingoll.Wlile1,681new
limitedliubilitycoipoiutionsiegisteied
loi tle ist time in 200S in Beluius,
6,142didsoin2011.Indeed,tletotul
numbeiiegisteiedintlispeiiod
incieusedby68.9%(liom27,619
to46,6S3).
12
12
World Bank Group Entrepreneurship Snapshots. The full data set is available on the Doing Business website (http://www.doingbusiness.org).
21
Tlecontinuingtuibulenteconomicenviionmentis
muking decisions uiound tux policy moie dilcult.
Intlewukeoltleglobuleconomicdowntuin,
economiesuieundeiincieusingpiessuietobe
competitive,toimplementtuxsystemstlutcunlelp
encouiugeeconomicgiowtl,wlileuttlesumetime
uddiessing public sectoi decits, und putting economies
onumoiesoundlooting.Goveinmentspendingcuts
undulossolpublictiustinbusinessundconceinsovei
wletleicompuniesuiepuyingtleiigltumountoltux
luve intensied tle culls loi tux ieloim und tiunspuiency
uioundlowtuxsystemsopeiute,witluviewtololding
botl goveinments und businesses touccount.
ThePwCcommentory
Cluptei2
22
Governments also see a need to put
in place tax systems which are seen
WREHHIFLHQWFDQKHOSWRDWWUDFW
LQYHVWPHQWDQGLQWXUQFDQKHOSIRVWHU
HFRQRPLFbJURZWK
23 Paying Taxes 2013. PwC commentary
Aneconomiconolysis
Tuxution,economicgiowtl
undinvestment
Tledisuppointingpeiloimunceol
munyeconomiespuiticuluilytle
ligleiincomecountiiesintleWest
luslocusseduttentiononlow
goveinmentscunboosteconomic
giowtl. As tle woild economy lus
emeiged liom tle globul nunciul
ciisis,muclemplusislusbeenon
piovidingustimulustodemund
undimpiovingtlepeiloimunceol
tle nunciul system. In uddition,
goveinmentsuiestuitingtoslilttleii
uttentiontotlepotentiulolsupply-side
meusuies,wlicluimtoimpiovetle
euseoldoingbusinessinucountiy.
Tleeusieiitistodobusiness,tlemoie
likelyitistlutnewbusinesseswillbe
loimedundexistingbusinesseswill
giowcieutingvulue-uddedundjobs.
And economies wleie it is eusiei to do
businesswilltendtouttiuctinvestment
liomoveiseus,piovidingunudded
potentiulboosttoeconomicgiowtl
undjobs.
13
Andrew Sentance
Senior Economic Adviser
PwC (UK)
Oneimpoituntwuyinwlicltle
goveinmentcunimpiovetleeuseol
doingbusinessinuneconomyisby
ieducingtlebuidenoltletuxsystem
on ims. Tlis cun be done in u numbei
ol dilleient wuys. Fiist ol ull, it cun
beuclievedbyloweiingtuxiutesund
eusingtleoveiullbuidenoltuxution.
Tlutisclullengingbecuuseuieduction
intleoveiulltuxbuideninuneconomy
cunonlybeuclievedonusustuinuble
busisilgoveinmentspendingususluie
oleconomicuctivityisulsoieinedinto
tle sumeextent.
A second wuy ol cieuting u moie
business-liiendlytuxsystemistliougl
tuxieloim.Tuxiuteswlicldiiectly
beuionbusinessuctivitycunbe
biougltdownbysliltingtlebuiden
oltuxuwuyliomweultl-geneiuting
uctivitiesundtowuidspeisonul
expendituie sucl us VAT. Anotlei
wuyinwlicltuxieloimcunlelp
cieuteubetteiclimuteloibusiness,
isbybioudeningtletuxbusewlicl
enublestlesumeumountoltuxutionto
beiuisedwitluloweioveiulltuxiute.
TleUKscuiientuppioucltocoipoiute
tuxieloimisunexumpleoltliskind
oluppioucl.
13
Djankov, Simeon, Caralee McLiesh and Rita Ramalho. 2006. Regulation and Growth. Economics Letters 92 (3):395401.
Eifert, Benjamin. 2009. Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data, 200307. Working Paper 159,
Centre for Global Development, Washington, DC.
24 $QHFRQRPLFDQDO\VLV
One important way in which the
government can improve the ease of
doing business in an economy is by
easing the burden of the tax system on
UPV7KLVFDQEHGRQHLQDQXPEHURI
GLIIHUHQWZD\V
A tliid wuy in wlicl clunges to tle tux
systemcunlelpeconomicgiowtlisby
eusingtleudministiutivebuidenon
businessesieducingtletimewlicl
businessesneedtospenddeulingwitl
tuxmutteisundtlecomplexityoltle
puymentsystems.
Foi tle lust eiglt yeuis, PwC lus been
woiking witl tle Woild Bunk und IFC
tomeusuielowbuidensometletux
systemisindilleienteconomiesusing
tlieesimpleindicutois:tleTotulTux
Ruteolucusestudycompunyusu
peicentuge ol piots; tle numbei ol
dilleientpuymentswliclbusinesses
needtodeulwitl;undtletime
spentbybusinessesdeulingwitltux
compliunce.Nowtluttlesemeusuies
luvebeenculculutedloiuluige
numbeioleconomiesoveitleeiglt
yeuipeiiod,weleelweluveustiong
enougldutusettoconductsome
stutisticulunulysisintotleielutionslip
betweentletuxsystemindilleient
economiesundtleiieconomic
giowtlundubilitytouttiuctoveiseus
investment.
Foi tlis puipose we luve unulysed
tleexpeiienceol166economiesin
ouidutubuse
14
toseelowtlelevel
oltuxutiononbusinessesintlese
economiesunditscomplexityielutes
totleiiiuteolgiowtlundubilityto
uttiuctinwuidinvestment.
Whotdidouronolysisshow?
Weusediegiessionunulysistolook
uttleielutionslipbetweentle
PuyingTuxesindicutoiswliclwe
luvebeenmeusuiingoveitlepeiiod
2004-11und:(1)tleeconomys
uveiugeeconomicgiowtliuteovei
tlutpeiiod;und(2)tlegiowtlol
tlestockolinwuidinvestmentovei
tlesumepeiiod.Tlelypotlesiswus
tluteconomieswliclludligleitux
buidensoimoiecomplextuxsystems
wouldexpeiienceloweigiowtloi
inwuidinvestmentoveiupeiiodol
yeuis.Weulsolookeduttleimpuctol
clungesintlePuyingTuxesindicutois,
usitisulsolikelytluteconomies
wlicluieuctivelyseekingtoieduce
tlebuidenundcomplexityoltletux
systemwillulsoexpeiiencestiongei
giowtl.
Ouiunulysissouglttotukeinto
uccountundcontiolloitlelucttlut
emeigingunddevelopingeconomies
luvestiongeigiowtlpotentiulbecuuse
tleiieconomiesuiegiowingliomu
loweibuse.Souswellusincluding
ouiPuyingTuxesindicutoisintle
unulysisweincludedtlelevelolGDP
peileudineucleconomyuttlestuit
oltlepeiiodweweieconsideiing
(2004).Tliswouldbeexpectedtoluve
unegutivecoiielutionwitlgiowtl
peiloimuncewitliicleimoie
mutuieeconomiesexpeiiencinglowei
giowtliutesundpooieicountiies
luvingmoiescopetocutcl-upwitl
tleleudingeconomies.Tlisdidindeed
tuinouttobetlecuse.
Weneedtobecuutiousuboutinleiiing
toomuclliomtleiesultsgiventle
complexnutuieoltleielutionslip
betweentletuxsystemundeconomic
giowtl. Foi exumple, clunges in tle
tuxsystemmuywellbecoiieluted
witlotleipolicydevelopmentswlicl
impiovetlebusinessclimuteinun
economyundlenceiuisegiowtl.
Howevei,tleiesultsuieintle
diiectionwliclwewouldexpect
economieswitlloweituxiuteson
businessundlesscomplextuxsystems
expeiiencestiongeigiowtlunduttiuct
moieloieigndiiectinvestment.
14
Some countries covered by the Paying Taxes study had to be excluded due to a lack of consistent GDP and FDI data for the full period of our analysis. Data
for economic growth was drawn from the IMF World Economic Outlook database and FDI data was from UNCTAD.
Figuie 2.1 below summuiises tle
uveiugeiesultsolouiiegiession
unulysisloieconomicgiowtl
uciosstle166countiies.
1S
Inteims
oleconomicgiowtlundinwuid
investment,tleTotulTuxRute
lucingouicusestudycompunylus
tleexpectednegutivecoiielution
witleconomicgiowtlundwitl
inwuidinvestment.Buttleieuieulso
signicunt negutive giowtl impucts
liomtleudministiutivecomplexity
oltletuxsysteminpuiticuluitle
numbeioldilleienttuxpuymentsu
businesslustomuke.Weulsolound
tlutineconomieswleietleiewus
uieductionintuxudministiution
complexitybotlinteimsoltle
numbeiolpuymentsundtletime
tlutbusinessestuketodeulwitltux
mutteistliscouldluveupositive
impuctoneconomicgiowtl.
Doesthetoxsystemslow
economicrowth?
Ouiunulysissuppoitstleviewtlut
tlebusinesstuxsystemslows(oi
cieutesudiugon)economicgiowtl,
botltliougltleoveiullbuidenol
tuxpuymentsundtlecomplexity
oltletuxsystem.Weneedtoexeit
cuutionloweveiininteipietingoui
iesults,butilwetuketleiesultsut
lucevulue,uciossulltleeconomies
westudied,tletotultuxdiugovei
tlepeiiodolouiunulysis(2004-
2011)wusestimutedut1.1S%pei
unnumonuveiuge.Tlisistleuveiuge
umountbywlicltleleveloltuxes,
tleudministiutivebuidenoldeuling
witltletuxsystem,undclungesintux
complexityluveimpuctedgiowtlin
tleeconomiesinouisumple.
15
More detail of the regression analysis is on our
PwC website at www.pwc.com/payingtaxes
Source: PwC analysis of the impact of business tax payments in 166 countries,
2004 to 2011
As Figuie 2.1 slows, tleie uie tliee
components to tle inuence wlicl
tlebusinesstuxsystemuppeuisto
exeitoneconomicgiowtl,uccoiding
to oui unulysis. Tle most signicunt is
tleudministiutivebuidenoltletux
system, ieected in tle numbei ol tux
puymentsbusinessesneedtomuke.
Tlisisussociutedwitludiug
oneconomicgiowtloluiound
onepeicentugepointpeiunnum
uciossouisumpleolcountiies.But
tlisismodeiutedtosomeextentby
tlesecondcomponent,wliclisu
ieductionintlecomplexityoltle
tuxsystemwlicllusbeentuking
pluceoveitime.Tlisieductionin
complexityisussociutedwitlun
incieuseingiowtlbyunuveiugeol
uiounduquuiteiolupeicentugepoint
peiunnumuciosstleeconomiesin
ouisumple.
TletliidcomponentistleTotul
Tux Rute us u peicentuge ol piot
wlicluveiugeduioundS0%loitle
economiesinouistudyoveitlepeiiod
2004-2011. Accoiding to oui estimutes,
eucltenpeicentugepointcutintle
TotulTuxRute(ielutivetobusiness
piots) is ussociuted witl un incieuse
intleunnuuleconomicgiowtliuteby
justundei0.1%.Tletotuldiugon
economicgiowtlcieutedbytleTotul
TuxRuteonbusinessloiulleconomies
inouistudyisuiound0.4%peiunnum.
Figure 2.1: Economic growth and business taxation
Average % pa change in GDP growth linked to impact of business taxes
0.4
0.2
0
-0.2
-0.4
-0.6
-0.8
-1.0
-1.2
-1.4
-1.6
Reduction in tax
administration
Total Tax Rate
Number of payments
Toxdro Toxreform
Oneoltleconclusionswemigltdiuw
liomtleseiesultsistlutclungesin
tleudministiutiveuspectsoltletux
systemseemtoluveumuclbiggei
potentiulimpuctoneconomicgiowtl
tlundilleiencesintleumountol
tux puid. Tlis muy ieect tle luct
tluttuxievenuesuieiecycledwitlin
economiestosuppoitgoveinment
expendituiewliclcunbepositive
loi economic giowtl (il elciently
spent)tliougltleimpucton
educution,leultl,inliustiuctuie,etc.
Sotleieisucieditsidetotleequution
wlentuxisiuisedtosuppoittlese
economicullyundsociullyuselul
uctivities.Buttleudministiutionund
complexityoltletuxsystemuddsto
tleoveiullbuidenonsocietywitlno
compensutingbenet.
Wecunusetleseiesultstolookut
tle implicutions ol tle ndings ol tle
Puying Tuxes 2013 Study. Figuie 2.2
slowstleestimutedtuxdiugon
economicgiowtlbusedontlelutest
iesults,usingtleiegionuluveiuges
discussedluteiintliscluptei.Itslows
tluttleussociuteddiugongiowtlin
tleiegionwitltleliglesttuxiutes
und numbei ol puyments, Aliicu, is
ubout1%peiunnumgieuteitluntle
best, Noitl Ameiicu. Tle muin luctoi
cieutingdilleiencesbetweeniegions
istlenumbeioltuxpuyments,iutlei
tluntleTotulTuxRute.Tlisliglliglts
tle signicunt potentiul benets to
economicgiowtlolieductionsintle
udministiutivecomplexityoltletux
systemlucingbusiness.
Thetoxsystemond
inwordinvestment
Ouiunulysissuggestedtluttle
udministiutiveuspectsoltletux
systemdidnotluveunoticeubleellect
ontlelevelolinwuidinvestment,
buttlelinkwitltleTotulTuxRute
uppeuiedstiongei.Tleuveiuge
tuxdiugontlegiowtlolinwuid
investmentuciossulltlecountiies
in oui sumple wus 3.7%. And u 10%
cutintleTotulTuxRuteisussociuted
witlunincieuseintlestockolinwuid
investmentby0.7%peiunnum
uccoidingtoouiunulysis.
Source: PwC analysis of the impact of business tax payments in 166 countries, 2004 to 2011
Figure 2.2: Growth and business taxes by region
% pa tax drag on GDP growth based on 2013 survey results
Number of payments
Total Tax Rate
0
-0.2
-0.4
-0.6
-0.8
-1.0
-1.2
-1.4
-1.6
-1.8
North
America
Asia
Pacic
South
America
World
average
Central Asia
& Eastern
Europe
Central
America &
Caribbean
Africa Middle
East
EU &
EFTA
Tlelucttlutinwuidinvestment
uppeuistobemoiesensitivetotle
oveiullTotulTuxRuteundlesssensitive
totleudministiutivetuxbuidenmuy
ieect tle luct tlut u complex und
time-consumingtuxsystemlusu
biggeinegutiveimpuctonsmullund
medium-sizedenteipiiseswlouieless
involved witl ows ol inteinutionul
investment.Luigeicompuniesluve
tlemunugementsystemstocopewitl
complextuxsystems,butwillstill
tend to slilt tleii investment ows to
locutionswleietleoveiulltuxbuiden
usmeusuiedbytlePwCTotulTux
Rutemeusuieislowei.
Policyimplicotions
Tlisunulysislusinteiesting
implicutionsloipolicy-mukeis.It
suggeststlutwliletletotulumount
iuisedinbusinesstuxutionisussociuted
witlloweieconomicgiowtlund
inteinutionulinvestment,tle
udministiutivebuidenundcomplexity
oltletuxsystemlustlepotentiulto
luveugieuteicoiielutionwitloveiull
giowtl.Tleieiscleuilyulotolscope
loi scul uutloiities to uct in tlis uieu,
undoveitlepeiiodwestudiedtleie
uppeuied to be u noticeuble benet
togiowtlpeiloimunceineconomies
wliclexpeiiencedieductionsintle
complexityoltleiituxsystems.
Tlissuggeststlutgoveinmentskeen
tocieuteumoiebusiness-liiendlytux
climutewliclismoiesuppoitiveol
economicgiowtlneedtolocusnot
onlyontleoveiulliutesundbuiden
oltuxution,butulsoonminimising
tletimeundelloitwliclbusinesses
needtospendcomplyingwitltleii
tuxsystems.
7KLVVXJJHVWVWKDWJRYHUQPHQWVNHHQ
to create a more business-friendly tax
climate which is more supportive of
economic growth need to focus not
only on the overall rates and burden
RIWD[DWLRQEXWDOVRRQPLQLPLVLQJ
the time and effort which businesses
need to spend complying with their
WD[bV\VWHPV
ThePoyinToxes2013
lobolresults
30 7KHJOREDOUHVXOWV
The 2013 lobol tox prole
Figuie 2.3 slows tle globul uveiuge
iesultsloieucloltlePuyingTuxes
indicutois.Itulsoslowstleiunge
uciosstle18Seconomiesintlestudy.
Onuveiugeuioundtlewoildouicuse
studycompunymukes27.2puyments,
tukes267louis(neuilysevenweeks
busedonu40louiweek)undlusu
tuxcostol44.7%olitscommeiciul
piot. Tle iunge loi eucl indicutoi is
veiywide.Tlenumbeiolpuyments
iunges liom 3 in Hong Kong SAR,
Clinu und Suudi Aiubiu, to 71 in
RepublicuBolivuiiunudeVenezuelu.
Tletimetocomplyislowestintle
United Aiub Emiiutes und is liglest
inBiuzil.TlelowestTotulTuxRute
isloundinVunuutuundtleliglest
intleDemociuticRepublicoltle
Congo(wleieucuscudingsulestux
still exists). As will be seen in u lutei
sectionoltlisiepoit,tlecompliunce
indicutoisluvecontinuedtolullwlile
tleTotulTuxRutelusstubilisedintle
mostiecentpeiiod.
Wlilecoipoiuteincometuxiscluiged
in179(97%)oltleeconomiesintle
study,tleiesultsluveconsistently
slowntlutuciossouitlieeindicutois
itiemuinsonlypuitoltletuxbuiden
onbusiness.Ituccountsloi12%
olpuyments,26%oltletimeund
36%oltleTotulTuxRuteundtlese
peicentugesluveluidlyclunged
liom pievious studies (see Figuie 2.4).
Lubouituxesundsociulcontiibutions
uieleviedin184economiesuioundtle
woild, wlile VAT (witlin otlei tuxes)
isnowuleutuieoltletuxsystemin
1S4economies.
Figure 2.4: The global allocation of the Paying Taxes indicators across prot taxes, labour
taxes and other taxes
Prot taxes
Labour taxes
Other taxes
Puyments Time TotulTuxRute
49%
39%
38%
26%
28%
36%
36%
36%
12%
Figure 2.3: The global average result for each indicator
Tax type Total Tax Rate% Time to comply
Number of
payments
Prot taxes 16.2 68 3.4
Labour taxes and contributions 16.2 97 10.6
Other / consumption taxes 12.3 102 13.2
Total 44.7 267 27.2
Minimum 8.4 12 3.0
Maximum 339.7 2600 71.0
Source: PwC analysis.
TotolToxRote
WliletleiungeoltleTotulTux
Rute is wide (see Figuie 2.S), 116
economiesoutoltle18Seconomies
(63%)luveuiutebetween26%und
S0%intlecuiientstudy(2011).Tlis
isusligltlyligleiconcentiutiontlun
intlepieviousyeui(114outol183
economies),undwlencompuiedwitl
tleiesultsloi2004(PuyingTuxes
2006),itiscleuitlutTotulTuxRutes
luvegeneiullylullenundluvebecome
moieconcentiuted.In2006tleieweie
only93outol174economies(S3%)in
tle26%toS0%iunge.Notsuipiisingly
inuwoildinwliclglobulisutionis
beingembiucedundcompuiisonsuie
moieeusilymudewitlgeogiuplic
neiglbouisundeconomicpeeis,tle
iungeoltleindicutoisisnuiiowing
suggestingugiuduulmovetowlutmuy
bepeiceivedusgoodpiuctice.
Tle iegionul compuiison in Figuie 2.6
slows tlut loui iegions, (Centiul Asiu
& Eustein Euiope, Noitl Ameiicu,
Centiul Ameiicu & Cuiibbeun und tle
EU & EFTA) ull luve uveiuge iutes
tlutuieclosetotlewoilduveiuge.
Tlisuguinisustiongindicutionol
lowtleiungeoltuxiutesuppliedis
nuiiowing. Tle Asiu Pucic iegion lus
un uveiuge wlicl is ulmost one ltl
belowtlewoilduveiugewliletle
MiddleEustlustlelowestuveiuge
wliclisulmostlulltlewoilduveiuge.
Rutes uie liglest in Aliicu witl un
uveiugeolS7.4%,ulmostonetliid
ubovetlewoilduveiuge,loweveiit
isolnotetlutiltleeconomieswlicl
stillluveucuscudingsulestuxweie
excluded,tlentlisuveiugewouldlull
to43.4%wliclwouldtlenbeonly
sligltlyuboveuievisedwoilduveiuge
ol40.9%.TleuveiugeTotulTuxRute
is ulso ligl in Soutl Ameiicu ut S3.S%
wlicl is ulmost one ltl ubove tle
woilduveiuge.
Figure 2.5: Distribution of the Total Tax Rate across 174 economies in 2011 and 2004
5
1
%

-

5
5
%
5
6
%

-

6
0
%
6
1
%

-

6
5
%
6
6
%

-

7
0
%
7
1
%

-

7
5
%
7
6
%

-

8
0
%
8
1
%

-

8
5
%
8
6
%

-

9
0
%
9
1
%

-

9
5
%
9
6
%

-

1
0
0
%
>
1
0
0
%
4
6
%

-

5
0
%
4
1
%

-

4
5
%
3
6
%

-

4
0
%
3
1
%

-

3
5
%
2
6
%

-

3
0
%
2
1
%

-

2
5
%
1
6
%

-

2
0
%
1
1
%

-

1
5
%
6
%

-

1
0
%
0

-

5
%
35
30
25
20
15
10
5
0
2011
2004
Number of economies
Total Tax Rate
Figure 2.6: Regional comparison of the Total Tax Rate
Middle East
Asia Pacic
Central Asia & Eastern Europe
North America
EU & EFTA
Central America & Carribean
World Average
South America
Africa
Prot taxes
Labour taxes
Other taxes
9.2 13.9 0.5 23.6
17.6 10.7 8.1 36.4
10.3 20.4 10.6 41.3
20.2 16.4 5.4 42.0
12.7 26.4 3.5 42.6
22.5 12.1 8.6 43.1
16.2 16.2 12.3 44.7
16.9 17.3 19.3 53.5
18.6 14.4 24.3 57.4
32 7KHJOREDOUHVXOWV
Timetocomply
Figuie 2.7 slows tlut tle indicutoi
loitlelouistocomplyulsolusun
extiemelywideiungewitloutlieis
ut 12 louis in tle United Aiub
Emiiutesund2,600louisinBiuzil.
Tledistiibutionloitlisindicutoi
isloweveiulsobecomingmoie
concentiutedintle1013S0iunge.
132outoltle18Seconomiesin
tlecuiientstudy(2011)uieintlis
iungecompuiedto10Soutoltle174
economiesin2004.
Tle iegionul compuiison in Figuie 2.8
slowsoneiegionlusunuveiugewlicl
isclosetotlewoilduveiuge,Centiul
Asiu & Eustein Euiope. Five ol oui
iegionsluveielutivelylowuveiuges,
tleMiddleEustluvingtlelowest
witl1S8louis,some40%belowtle
woild uveiuge. Aliicu lus un uveiuge
46louisoi17.2%ubovetlewoild
uveiuge, wlile Soutl Ameiicu lus tle
liglestuveiugeut619(1Sweeksbused
onu40louiweek)wliclisulmost
2.Stimestlewoilduveiuge.Tletime
tukeninEcuudoi,BoliviuundBiuzilis
tlemujoiieusonloitleliglnumbei
ollouistukenleieundweexploie
tlisluitleiinouicommentuiyon
puge126.
Figure 2.7: Distribution of the time to comply across 174 economies in 2011 and 2004
5
0
1

-

5
5
0
5
5
1

-

6
0
0
6
0
1

-

6
5
0
6
5
1

-

7
0
0
7
0
1

-

7
5
0
7
5
1

-

8
0
0
8
0
1

-

8
5
0
8
5
1

-

9
0
0
9
0
1

-

9
5
0
9
5
1

-

1
0
0
0
>
1
0
0
0
4
5
1

-

5
0
0
4
0
1

-

4
5
0
3
5
1

-

4
0
0
3
0
1

-

3
5
0
2
5
1

-

3
0
0
2
0
1

-

2
5
0
1
5
1

-

2
0
0
1
0
1

-

1
5
0
5
1

-

1
0
0
0

-

5
0
35
30
25
20
15
10
5
0
2011
2004
Number of economies
Time to comply (Hours)
Figure 2.8: Regional comparison of the time to comply
Middle East
EU & EFTA
North America
Asia Pacic
World Average
Africa
South America
Labour taxes
Consumption taxes
44 89 25 158
38 88 58 184
96 53 65 214
42 99 77 218
75 72 83 231
76 88 97 261
68 97 102 267
78 103 133 313
137 193 289 619
Numberofpoyments
Tleindicutoiloitlenumbeiol
puymentsulsolusuveiywide
iungewitloutlieisut3puyments
(Hong Kong SAR, Clinu und Suudi
Aiubiu) und 71 puyments (Repblicu
BolivuiiunudeVenezuelu)intlelutest
study.121economiesluvebetween
6und3Spuyments(compuiedto
199lustyeui).Eiglteconomiesluve
leweitlun6puymentsundS6luve
moietlun3Spuyments.Tleieuie
twoclusteisintlisdistiibutionwitl
34economiesluving610puyments
luigelyusuiesultolluvingtleubility
to le und puy ull ol tleii mujoi tuxes
online,wlile27economiesluve
between31und3Spuyments.Mostol
tleseeconomiesluvesomeelectionic
ling und puyment und un ubility to
puy some tuxes jointly. As slown in
Figuie 2.9, wlen compuied witl tle
distiibutionin2004itiscleuitlut
numbeioleconomiesintleseclusteis
lusincieused.In2004tleieweieonly
17economiesintle610puyment
iungewliletleieweie2Seconomies
intleiunge313S.Tlisillustiutes
welltleudvuncemudeoveitlepeiiod
oltlestudywitlieguidtoelectionic
ling und puyment.
Figure 2.9: Distribution of the number of payments across 174 economies in 2011 and 2004
5
1

-

5
5
5
6

-

6
0
6
1

-

6
5
6
6

-

7
0
7
1

-

7
5
7
6

-

8
0
8
1

-

8
5
8
6

-

9
0
9
1

-

9
5
9
6

-

1
0
0
>
1
0
0
4
6

-

5
0
4
1

-

4
5
3
6

-

4
0
3
1

-

3
5
2
6

-

3
0
2
1

-

2
5
1
6

-

2
0
1
1

-

1
5
6

-

1
0
0

-

5
35
30
25
20
15
10
5
0
Number of economies
Number of payments
2011
2004
34 7KHJOREDOUHVXOWV
Tleiegionulcompuiisonin
Figuie 2.10 slows ve ol oui eiglt
iegionsbelowtlewoilduveiugeund
tliee ubove. In Noitl Ameiicu und tle
EU & EFTA, tle common uvuilubility
ol electionic ling und puyment keeps
tleuveiugenumbeiolpuymentslow
eventlougltlenumbeioltuxesis
similuitotlutloundinotleiiegions
us cun be seen in Figuie 2.11. At tle
otlei end ol tle scule in Aliicu und tle
Centiul Ameiicu & Cuiibbeun iegion
tle use ol electionic ling und puyment
ismoielimited,undtlis,coupled
witltleexistenceolnumeiousluboui
tuxesundsociulcontiibutions,und
otleituxes,keepstleiiuveiuges9.8
(36%)und7.7(28%)puymentsubove
tlewoilduveiugeiespectively.Tle
MiddleEustiegionisbelowtlewoild
uveiuge but us Figuie2.11 slows tlis is
diivenbyluvingleweituxes,ultlougl
tle intioduction ol electionic ling
und puyment in Suudi Aiubiu und Tle
United Aiub Emiiutes lus lelped biing
tlisuveiugedownmoieiecently.
GloboltrendsforPoyinToxes
2012/2013ondoverthepost
eihtyeors
TletiendsloitlePuyingTuxes
indicutoisoveiuneigltyeuipeiiod
luveslownuconsistentieductionin
tleuveiugetuxbuidenonbusiness
uciosstletlieePuyingTuxes
indicutois.Intlissectiontleuveiuges
uieculculutedonlyloitloseeconomies
tlutluvebeenincludedinulleiglt
yeuisoltlestudy(174economies)
toensuietlutweiepiesentutiue
tiend.Tlevuluesslownleieloi
PuyingTuxes2013uveiuges(culendui
yeui2011)uietleieloiedilleientto
tleuveiugesslowneuiliei,ustleie
uienow18Seconomiesintlemost
iecentstudy.
Tletiendsoveitleeigltyeuipeiiod
uie slown in Figuie 2.12. Tley slow
u7.7%lullintleTotulTuxRute,ulull
intlenumbeiollouisolS4undulull
intlenumbeiolpuymentsby6.S.Tle
lullintleindicutoislusbeendiivenby
296ieloims.
Figure 2.10: Regional comparison of the number of payments
Figure 2.11: Regional comparison of the number of taxes
North America
EU & EFTA
Middle East
South America
Asia Pacic
World Average
Africa
Prot taxes
Labour taxes
Other taxes
1.3 3.0 4.0 8.3
1.6 2.6 8.7 12.8
1.8 10.4 5.4 17.6
3.3 9.0 12.3 24.6
3.4 11.0 10.5 24.8
3.4 10.5 13.2 27.2
4.6 9.3 16.5 30.4
5.1 13.5 16.3 34.9
3.9 15.1 18.0 37.0
Middle East
Asia Pacic
World Average
North America
Africa
South America
EU & EFTA
Central America and Carribean
Prot taxes
Labour taxes
Consumption taxes
Other taxes
1.1 1.5 0.4 2.7 5.7
1.1 2.1 1.3 4.3 8.8
1.3 2.5 0.9 4.4 9.1
1.3 2.5 1.0 4.9 9.8
2.0 4.0 1.3 3.0 10.3
1.4 2.2 1.0 5.8 10.5
1.3 3.3 1.4 4.6 10.7
1.3 2.9 1.1 5.5 10.9
1.4 3.0 1.2 5.4 11.0
Figure 2.12 The fall in the global average results between 2004 and 2011
Total Tax Rate (%) Time to comply (Hours) Number of payments
2011 2004 Change 2011 2004 Change 2011 2004 Change
Prot taxes 16.6 19.5 (2.9) 71 84 (13) 3.4 4.2 (0.7)
Labour taxes
& contributions
16.6 17.6 (1.0) 98 122 (24) 10.5 13.8 (3.3)
Other /
Consumption
taxes
12.7 16.5 (3.8) 107 125 (17) 13.5 16.0 (2.5)
Total 45.9 53.6 (7.7) 276 330 (54) 27.5 34.0 (6.5)
Africa
80%
70%
60%
50%
40%
30%
20%
10%
0
World Average
North America
Asia Pacic
Middle East
EU & EFTA
Central Asia &
Eastern Europe
Central America
& Caribbean
2004 2005
Total Tax Rate (%)
2006 2007 2008 2009 2010 2011
South America
TotolToxRote
Figuie 2.13 slows low tle uveiuge
globulTotulTuxRuteluslullenby
7.7%liomS3.6%inPuyingTuxes2006
(culenduiyeui2011),buttluttleiute
olieductionlusslowedintlemost
iecentpeiiod.Tleieuieulsosome
iegionuldilleiencestlutliebelindtlis
oveiullglobultiend.
Figure 2.13: The global and regional trends in the Total Tax Rate from 2004 to 2011
Fiom 2010 to 2011, tle uveiuge Totul
TuxRutelellbyonly0.3%compuied
toulullol3.3%tleyeuibeloie.Tle
uveiuge iute ol piot tux iemuined
ut, wlile tle iute loi luboui tuxes und
sociulcontiibutionsincieusedby0.1%
undotleituxeslellby0.4%.Wlen
compuiingtleiegions,tleuveiuge
TotulTuxRuteincieusedbetween2010
und 2011 in Aliicu, Centiul Asiu &
Eustein Euiope, tle EU & EFTA iegion,
und Soutl Ameiicu.
36 7KHJOREDOUHVXOWV
Oveitleeigltyeuipeiiodoltlestudy
tleieluvebeenluigeieductionsin
tle uveiuge Aliicun Totul Tux Rute und
tlis lus lud u signicunt impuct on tle
oveiullglobuliute.Tlislusincluded
tleimpuctolseveiuleconomies
ieplucingcuscudingsulestuxeswitl
VAT systems. Tle Aliicun Totul Tux
Rutelusbeentleliglestolunyiegion
tliouglouttlepeiiodoltlestudy.
Reductionsintleiutesuppliedin
Centiul Asiu & Eustein Euiope luve
ulso contiibuted signicuntly to tle
globultiend,undluvenowlullen
belowtlewoilduveiuge.Tleiutes
in tle Asiu Pucic iegion, Centiul
Ameiicu & Cuiibbeun, und Noitl
Ameiicu luve lullen consistently und
continuetolull,undluveulwuysbeen
belowtlewoilduveiuge.Tleuveiuge
iute loi Soutl Ameiicu lus ulteied
little in tle lust ve yeuis ol tle study,
undlusulwuysbeenwellubovetle
woilduveiuge.
TleiutesuppliedintleMiddleEust
luvelullenduiingtleeigltyeuisol
tlestudyundluveulwuysbeenwell
belowtlewoilduveiugeundloiseven
oltlelusteigltyeuisluvebeentle
lowest. Tle initiul signicunt lull in tle
200SPuyingTuxesstudywustleiesult
oltlecuscudingsulestuxintleYemen
being iepluced by u VAT system.
Figuie 2.13 is ulso unotlei good
illustiutionollowtleiungeolglobul
TotulTuxRutesisnuiiowing.Moie
detuilsuioundtlesemovements
uppeuiintleiegionulsections
wlicllollow.
Total Tax Rate falls

7.7%
The average global
Total Tax Rate has
fallen by 7.7% from
53.6% in Paying
Taxes 2006.
Africa
700
600
500
400
300
200
100
0
World Average
North America
Asia Pacic
Middle East
EU & EFTA
Central Asia &
Eastern Europe
Central America
& Caribbean
2004 2005
Time (Hours)
Data year
2006 2007 2008 2009 2010 2011
South America
Figure 2.14: The global and regional trends in the time to comply from 2004 to 2011
Timetocomply
Figuie 2.14 slows low tle globul
uveiugeloitletimetocomplylus
lullenbyS4louisliom330in2004.
Tleielusbeenuieductionineuclyeui
oltlestudywliclluscontinuedintle
mostiecentpeiiod(8louis).Tleie
uieuguinsomeiegionuldilleiences
tonote.
In Soutl Ameiicu, wlile tle louis luve
lullenconsistentlyoveitlepeiiodol
tlestudy,tleieductionlusbeensmull
undtlisiegionlusulwuyslud,und
continuestoluve,tleliglestnumbei
ollouisiequiiedloicompliuncebylui.
38 7KHJOREDOUHVXOWV
Foi Centiul Asiu & Eustein Euiope,
tletimetocomplyluslulleneveiy
yeuisincePuyingTuxes2007undtlis
luscontinuedintlemostiecentpeiiod
witlulullol48louis.Oveitleeiglt
yeuipeiiodtlisiegionlusiegisteied
tleluigestlullol200louis,ulull
ol43%.
In Aliicu tle uveiuge numbei ol louis
lelluntil2010butlusincieusedulittle
intlemostiecentpeiiod.Tleiegion
nowlustlesecondliglestuveiuge
numbeiollouis.
In tle Asiu Pucic iegion tle numbei
ollouislelluntilPuyingTuxes2012
butlusulsoincieusedintlemost
iecentstudy.
In tle Centiul Ameiicu & Cuiibbeun
iegiontleielusbeenuieusonubly
consistentlullintlelouistocomply
wliclluscontinued,wlileinNoitl
Ameiicu und tle EU & EFTA tle time to
complyluslulleneveiyyeui.
IntleMiddleEust,tletimetocomply
lusbeenstubletliouglouttlepeiiod
oltlestudy.Tlisiegionlusulwuys
ludtlelowestuveiugetimetocomply.
Time to comply falls

54
The global average
for the time to
comply has fallen
by 54 hours
VLQFHb
Number ofpoyments
Tleglobuluveiugeloitlenumbeiol
puymentsluslullenineveiyyeuioltle
study.Tleindicutoiluslullenby6.S
puyments. All iegions luve contiibuted
to tlis lull (see Figuie 2.1S).
Tleluigestlullsluvebeeniecoided
loi tle Centiul Asiu & Eustein Euiope
iegion(luigelyduetotleintioduction
ol online ling und puyment) und tlese
lullsluvebeenucceleiutingwitlu36%
lulloveitlelustlouiyeuis,sotlutit
isnownolongeitleiegionwitltle
liglestuveiugenumbei.
Africa
60
50
40
30
20
10
0
World Average
North America
Asia Pacic
Middle East
EU & EFTA
Central Asia &
Eastern Europe
Central America
& Caribbean
2004 2005
Payments (Number)
Data year
2006 2007 2008 2009 2010 2011
South America
Figure 2.15: The global and regional trends in the number of payments from 2004 to 2011
40 7KHJOREDOUHVXOWV
Tle Centiul Ameiicu & Cuiibbeun
iegionlusludusteudylullintle
indicutoioveitlestudypeiiodbut
iemuinubovetleglobuluveiuge.In
Aliicu tle ieduction in tle numbei ol
puymentslusbeensmull,sotluttle
iegionnowlustleliglestuveiugeol
unyiegion.
Altei Centiul Asiu & Eustein Euiope,
Soutl Ameiicu lus seen tle next
luigestlullintleuveiugenumbeiol
puymentstukingitbelowtlewoild
uveiuge, wlile tle tiend loi Asiu Pucic
lusbeenmoiestuble.
TlisisoneindicutoiwleietleMiddle
Eustdoesnotluvetlelowestuveiuge.
Tle indicutoi lus been viituully ut
untiltlemostiecentpeiiodwlenit
luslullenby1.9,wliclis86%oltle
totuleigltyeuilull.
TlenumbeiolpuymentsloitleEU
& EFTA lus ulwuys been well below
tleglobuluveiugeundtlelullsluve
continued to be signicunt in iecent
yeuisustleeconomieswloluve
mostiecentlyenteiedtleEUluve
intioduced electionic ling und
puymentsystems.Tleeconomiesin
Noitl Ameiicu luve ulwuys lud tle
lowestuveiugenumbeiolpuyments,
und tle intioduction ol electionic ling
undpuymentinMexicoinPuyingTuxes
2008 conimed tlis position.
Number of payments falls
6.5
The global average
for the number
of payments has
fallen in every year
of the study. The
indicator has fallen
by 6.5 payments.
Thereionolonolyses
Aliicu
16
Aliicu lus tle liglest uveiuge
TotulTuxRuteolunyiegion.
Aliicu lus tle liglest uveiuge
numbeiolpuymentsol
unyiegion.
Wlile Aliicu lus un uveiuge
numbeioltuxesubovetle
woilduveiuge,itistleluck
ol electionic ling wlicl
istlemuinieusonloitle
liglnumbeiolpuyments.
Onlytlieeeconomiesluve
electionic ling loi ull
mujoituxes.
WliletleTotulTuxRute
loitleiegionluslullen
signicuntly (by 12.3% luigely
usuiesultoltleieplucement
olcuscudingsulestuxes),lulls
intletimetocomplyluve
been moie modeiute (2Slouis)
undlullsintlenumbeiol
puymentsluvebeensmull
(1.9puyments).
Otleituxesuieuluigei
elementoltleTotulTux
Rute loi Aliicu tlun is seen
globully,buttleeliminution
olcuscudingsulestuxesis
ieducing tlisleutuie.
Aliicu lus tle second liglest
uveiugeloitletimetocomply.
Consumption tuxes (VAT)
tuke tle most time in Aliicu
133 louis onuveiuge.
16
The following economies are included in our analysis of Africa: Algeria; Angola; Benin; Botswana;
Burkina Faso; Burundi; Cameroon; Cape Verde; Central African Republic; Chad; Comoros; Congo,
Dem. Rep.; Congo, Rep.; Cte dIvoire; Djibouti; Egypt; Arab Rep.; Equatorial Guinea; Eritrea; Ethiopia;
Gabon; Gambia; The, Ghana; Guinea; Guinea-Bissau; Kenya; Lesotho; Liberia; Madagascar; Malawi;
Mali; Mauritania; Mauritius; Morocco; Mozambique; Namibia; Niger; Nigeria; Rwanda; So Tom and
Principe; Senegal; Seychelles; Sierra Leone; South Africa; Sudan; Swaziland; Tanzania; Togo; Tunisia;
Uganda; Zambia; Zimbabwe
Paying Taxes 2013. PwC commentary 41
Anolo
Countiyuiticle,
puge49
Uondo
Countiyuiticle,
pugeSS
SierroLeone
Countiyuiticle,
pugeS3
Mouritius
Countiyuiticle,
pugeS1
42 7KHUHJLRQDODQDO\VHV$IULFD
The 2013 tox prole
Figuie 2.16 slows tlut loi tle numbei
olpuymentsundtletimetocomply
tle piole ol tle tuxes levied on oui
cusestudycompunyisnotdissimilui
totleoveiullglobulputtein.Howevei
itslowstlutonuveiugeuciosstle
iegiontlepiopoitionolTotulTux
Ruteuccountedloibylubouituxesund
sociulcontiibutionsissmulleiwitl
ugieuteipiopoitioniepiesentedby
otleituxes.
Figure 2.16: The prole of taxes borne in Africa
Prot taxes
Labour taxes
Other taxes
49%
41%
42%
25%
33%
42%
25%
32%
10%
Zambia
Lesotho
Namibia
Botswana
Seychelles
Liberia
Mauritius
Rwanda
Sierra Leone
So Tom and Principe
Ethiopia
South Africa
Ghana
Nigeria
Mozambique
Malawi
Zimbabwe
Madagascar
Sudan
Swaziland
Uganda
Cape Verde
Djibouti
Cte d'Ivoire
Egypt, Arab Rep.
Gabon
Burkina Faso
Niger
Kenya
Tanzania
Guinea-Bissau
Equatorial Guinea
Senegal
Cameroon
Togo
Morocco
Mali
Burundi
Angola
Congo, Rep.
Tunisia
Central African Republic
Chad
Benin
Mauritania
Algeria
Guinea
Eritrea
Comoros
Gambia, The
Congo, Dem. Rep.
Africooveroe(57.4%)
Prot taxes
Labour taxes
Other taxes
1.1 10.4 3.7 15.2
13.1 2.9 16.0
17.2 1.0 4.5 22.7
21.7 3.6 25.3
23.3 1.7 0.7 25.7
18.3 5.4 3.7 27.4
11.6 9.6 7.3 28.5
21.2 5.6 4.5 31.3
17.6 11.3 3.2 32.1
22.1 6.8 3.6 32.5
27.0 2.0 4.3 33.3
24.3 4.1 4.9 33.3
18.5 14.7 0.3 33.5
22.3 10.8 0.7 33.8
27.7 4.5 2.1 34.3
23.6 7.7 3.4 34.7
20.5 5.1 10.2 35.8
14.0 20.3 1.7 36.0
13.8 19.2 3.1 36.1
28.1 4.0 4.7 36.8
25.0 11.3 0.8 37.1
18.0 18.5 0.7 37.2
17.7 17.7 3.3 38.7
9.8 20.1 9.6 39.5
13.2 25.8 3.6 42.6
18.4 22.7 2.4 43.5
14.8 22.6 6.2 43.6
17.3 20.1 6.4 43.8
28.1 6.8 9.5 44.4
20.2 18.0 7.1 45.3
14.9 24.8 6.2 45.9
25.4 20.6 46.0
14.8 24.1 7.1 46.0
29.9 18.3 0.9 49.1
9.3 26.5 13.7 49.5
25.2 22.7 1.7 49.6
10.9 34.3 6.5 51.7
40.0 10.2 2.8 53.0
24.6 9.0 19.6 53.2
15.1 32.5 15.3 62.9
15.2 25.2 22.5 62.9
19.8 45.4 65.2
31.3 28.4 5.7 65.4
14.8 27.3 23.8 65.9
17.6 50.6 68.2
6.6 29.7 35.7 72.0
23.5 9.6 40.1 73.2
8.8 75.8 84.5
31.4 186.5 217.9
6.1 12.8 264.6 283.5
58.9 7.9 272.9 339.7
Figure 2.17: The Total Tax Rates in Africa TotolToxRote
Figuie 2.17 slows tlut tle uveiuge
TotulTuxRuteloitleiegionutS7.4%
iswellubovetlewoilduveiuge.Itulso
slowsloweveitluttlecuscudingsules
tuxeswlicluiestillpiesentintliee
economies,Comoios,TleGumbiu
undDemociuticRepublicoltleCongo
contiibuteleuvilytotlisligliute
undulsototleliglpiopoitionol
otlei tuxes slown in Figuie 2.16. In
pustyeuis,tlestudylusseenieloims
inBuiundiundSieiiuLeonewlicl
ubolisledcuscudingtuxsystemsund
udopted u VAT system, und tlis lud
umujoiimpuct,biingingtleuveiuge
downundlelpingtoimpiovetleeuse
olPuyingTuxesintleseeconomies.Il
tletlieeeconomieswitlcuscuding
sulestuxesweieexcludedliomtle
uveiugeitwouldlullto43.4%,wlicl
wouldstillbeubovetleglobuluveiuge.
Lookinguciosstleotleieconomies
intlisiegion,coipoiuteincometuxis
piominentintlemujoiityoleconomies
wlilelubouituxesundsociul
contiibutionsuieielutivelylow.Tleie
uiesomeexceptions.Oneexumpleis
Muli wleie ve sepuiute tuxes - sociul
secuiitycontiibutions,puyiolltux,
uppienticesliptux,tuxloiyoutl
employmentunduccommodutiontux
uieleviedonwuges.
Timetocomply
Tleuveiugetimetocomplyintle
Aliicun iegion is 313 louis, wlicl
uguiniswellubovetlewoilduveiuge.
Tlis is slown in Figuie 2.18. Tle time
tocomplyin28economiesuiound
tleiegionisubovetlewoilduveiuge
witlsixeconomiesluvinglouisin
excessol600(ovei1Sweeks),Republic
olCongo,Cumeioon,Senegul,
Muuiituniu,CludundNigeiiu.Intlese
economiestleconsumptiontuxes
(ull ol wlicl uie VAT) uccount loi tle
luigestelementoltlecompliunce
time,undtlisisucommontlemein
unumbeiolotleieconomiesintle
iegion.42oltleS1economiesin
Aliicu now luve u VAT system, but
onlytlieeluveimplementedtletux
witl un electionic ling und puyment
cupubilitywlicliscommonlyused.
Administiution ol VAT is un impoitunt
issueundinKenyuloiexumpletle
cusestudycompunyspends243louis
oncomplyingwitltlistux.Heieitlus
to le montlly ietuins wlicl iequiie
detuiledunulysisoltleuccounting
inloimution. Online ling loi VAT,
intioducedin2009islelpingtoieduce
tlebuidenundtlelouistocomply
uielulling.
Tlevuiiouslevelsolgoveinmenttlut
compuniesuieiequiiedtocomply
witlcunulsocontiibutetouligl
compliunce buiden. 60% ol Aliicun
economiesluvemoietlunonelevelol
goveinmentlevyingtuxes.InNigeiiu,
tleeconomywlicliequiiestle
liglestnumbeiollouisloiouicuse
studycompunytocomplywitlitstux
ulluiisulsolustleliglestnumbei
oltuxesintleiegion.InNigeiiutle
cusestudycompunylustocomply
witltuxesleviedbytlieelevelsol
goveinment,undspendsutotulol
9S6louiseveiyyeuidoingso,witl
tlecompliuncetimesplitbetween
piot tuxes (398 louis), luboui tuxes
(396 louis) und VAT (162 louis). Tle
ubsence ol un online ling system ulso
contiibutestotlelugecompliunce
timebuidenintleeconomy.Similuily
in Clud, tle Aliicun economy witl
tlesecondliglestnumbeiollouis,
tleliglcompliuncelouiscunulsobe
uttiibutedinpuittotlemultiplelevels
olgoveinmentulongwitltleubsence
ol online ling.
Nigeria
Chad
Mauritania
Senegal
Cameroon
Congo, Rep.
Equatorial Guinea
Gabon
Algeria
So Tom and Principe
Guinea
Egypt, Arab Rep.
Gambia, The
Sierra Leone
Namibia
Kenya
Congo, Dem. Rep.
Lesotho
Ethiopia
Angola
Burundi
Benin
Burkina Faso
Cte d'Ivoire
Mali
Niger
Togo
Zimbabwe
Morocco
Mozambique
Ghana
Eritrea
Uganda
Guinea-Bissau
Madagascar
South Africa
Cape Verde
Sudan
Malawi
Tanzania
Mauritius
Liberia
Botswana
Tunisia
Rwanda
Zambia
Swaziland
Comoros
Djibouti
Seychelles
Africooveroe(313)
Labour taxes
Consumption taxes
398 396 162 956
300 216 216 732
120 96 480 696
120 96 450 6666
180 174 300 654
275 150 181 606
24 240 240 504
145 160 187 44492
137 131 220 488
152 110 189 451
40 192 192 424
32 192 192 416
69 165 158 392
40 96 240 376
15 168 174 357
40 46 264 350
45 52 243 340
116 124 96 336
70 104 150 324
150 132 24 306
75 125 82 282
80 48 146 274
30 120 120 270
30 120 120 270
30 120 120 270
30 120 120 270
30 120 120 270
30 120 120 270
78 96 68 242
70 48 120 238
50 60 120 230
40 88 96 224
24 96 96 216
45 66 102 213
160 24 24 208
9 72 120 201
100 50 50 200
35 85 66 186
70 70 40 180
67 78 30 175
60 52 60 172
36 61 64 161
60 60 38 158
40 40 72 152
64 30 50 144
20 48 66 134
48 24 60 132
8 48 48 104
4 48 48 100
30 36 16 82
40 36 76
Figure 2.18: The time to comply in Africa
Numberofpoyments
Tleuveiugenumbeiolpuymentsloi
tleiegionut37.0isulsowellubove
tlewoilduveiuge.Tlemujoiityoltle
puymentsielutetolubouituxesund
sociulcontiibutions,undotleituxes
(see Figuie 2.19).
Onlytlieeeconomies(Muuiitius,
Tunisiu und Soutl Aliicu) luve
electionic ling und puyment
commonly used loi tleii mujoi tuxes. A
luck ol electionic ling loi luboui tuxes
und loi VAT luigely uccounts loi 41 ol
tleeconomiesintleiegionluvingu
numbeiolpuymentswliclexceedtle
woilduveiugeol27.2.CotedIvoiieisu
goodexumpleoltlis.Itlustleliglest
numbei ol puyments in Aliicu (62)
undS9oltleseielutetolubouituxes
undVAT.
Mauritius
Tunisia
South Africa
Morocco
Rwanda
Madagascar
Burundi
Gabon
Malawi
Seychelles
Algeria
Egypt, Arab Rep.
Eritrea
Angola
Ethiopia
Uganda
Botswana
Congo, Dem. Rep.
Ghana
Comoros
Lesotho
Liberia
Sierra Leone
Swaziland
Djibouti
Mauritania
Mozambique
Namibia
Zambia
Cape Verde
Kenya
Niger
Nigeria
So Tom and Principe
Sudan
Cameroon
Mali
Burkina Faso
Equatorial Guinea
Guinea-Bissau
Tanzania
Zimbabwe
Gambia, The
Togo
Chad
Benin
Guinea
Senegal
Congo, Rep.
Cte d'Ivoire
Africooveroe(37.0)
Prot taxes
Labour taxes
Other taxes
1 1 5 7
1 4 3 8
2 3 4 9
1 12 4 17
4 4 9 17
1 8 14 23
6 4 15 25
3 4 19 26
2 8 16 26
12 12 3 27
12 17 29
1 12 16 29
2 12 16 30
4 12 15 31
2 12 17 31
3 12 16 31
6 13 13 32
1 16 15 32
6 12 14 32
3 12 18 33
5 12 16 33
5 12 16 33
5 12 16 33
2 13 18 33
5 12 18 35
1 13 23 37
7 12 18 37
3 12 22 37
5 13 19 337
3 24 14 41
5 14 22 41
3 14 24 41
3 20 18 41
2 12 28 42
2 12 28 42
13 12 19 44
4 29 12 45
2 24 20 46
1 24 21 46
5 12 29 46
5 24 19 48
5 14 30 49
5 13 32 50
5 24 24 53
12 24 18 54
5 24 26 55
4 24 27 55
3 36 19 58
3 36 20 59
5 36 20 61
3 24 35 62
Figure 2.19: The number of payments in Africa
Thetrends
Oveitleeigltyeuisoltlestudytleie
lusbeenimpiovementuciossulltliee
PuyingTuxesindicutois.TleTotulTux
Rute lus seen u signicunt ieduction.
Tlelullintlenumbeiollouislus
beenmoiemodeiuteundlusstulledin
moieiecentyeuiswliletlelullintle
numbeiolpuymentslusbeensmull
(see Figuie 2.20).
Timetocomply
Oveitlelusteigltyeuis,tleuveiuge
time to comply in Aliicu lus lullen by
2Slouis.EconomiessuclusLesotlo
undMuduguscuiluveieducedtle
numbeiollouisbyluigemuigins
luvingimplementedmujoiieloims.
InLesotlotletimetocomplylus
ieducedliomS64in2004to324
in2011.Tliscunbeuttiibutedto
tleincieuseduseoluccounting
soltwuieloitlepiepuiutionoltux
ling inloimution. In Muduguscui,
tlelouisneededtocomplyluve
lullenusvuiioustuxesluvebeen
ubolisled,includingcupitulguinstux,
piolessionultux,stumpdutyundtuxon
dividends.Tleseieloimsin2007weie
ukeydiiveibelindtleieductionintle
timetocomplyliom400louisin2004
to201in2011.
TotolToxRote
TleTotulTuxRutelusseentle
luigestlulls,tleseuiisingpuiticuluily
intlelustlouiyeuis,luigelyusu
iesultolseveiuleconomiesieplucing
tleii cuscuding sules tuxes witl VAT
systems.Oveiulltleuveiugestill
iemuinsutuligllevel.
Tleeconomieswliclluveiepluced
tleiicuscudingsulestuxesuie
Buiundi,Djibouti,Mozumbique,Sieiiu
LeoneundSwuzilund.Economiessucl
usSieiiuLeoneundBuiundiluve
tukencentiestugewitlieloimstlut
luveimpuctedtleTotulTuxRute.
Oveitlepusteigltyeuis,SieiiuLeone
lusieduceditsTotulTuxRuteby
240.3%wlileBuiundislusieducedits
by226.7%.
Figure 2.20: The indicator trends for Africa
400
300
200
100
0
Time (Hours)
2004 2005 2006 2007 2008 2009 2010 2011
80
60
40
20
0
Percentage/Payments
Total Tax Rate
Payments
Time
SieiiuLeoneieduceditscoipoiute
incometuxliom3S%to30%uswell
ustleliglestpeisonulincometux
iuteliom3S%to30%.InJuly2009,
Buiundiieplucedtletuinoveituxwitl
u VAT und tlis lus contiibuted to tle
lugeimpiovementintleTotulTux
Ruteloitleeconomy.
Numberofpoyments
Tleieductionintlenumbeiol
puymentsoveitleeigltyeuisoltle
studylusbeensmull,undintlemost
iecentpeiiodtleielusbeenusmull
incieuseintleuveiuge.Reloimsin
vuiiouseconomiessuclusTunisiu,
Cupe Veide, tle Aiub Republic ol
Egypt, und Algeiiu, luve lelped witl
tlesmullieduction.Heietuxesluve
beeneitleimeigedoiubolisled,ulong
witl some intioduction ol online ling
undpuyment.
Tunisiupiovidesugoodexumple.
EllectiveJunuuiy2009,compunies
witlutuinoveiolTND2millionund
uboveweieiequiiedtousetleonline
ling system. Tle ieloim not only
ieducedcompliuncetime,butulsotle
numbeiolpuymentsliom22toonly
8.InEgypt,uieloimintletuxluw
intleyeui200Ssuwtleeliminution
oltlestutedevelopmentdutyund
intioduction ol electionic ling. Tle
ieloimsledtouieductionolpuyments
liom42in2004to29in2011.
Over the eight years of
the study there has been
improvement across
DOOWKUHH3D\LQJ7D[HV
LQGLFDWRUV7KH7RWDO7D[
Rate has seen a
VLJQLFDQWUHGXFWLRQ
TlePuyingTuxesindicutois
demonstiutetluttletuxiegimein
Angolu continues to be dilcult loi tle
cuse study compuny. Angolu iunks 1S4
intlelutestPuyingTuxesstudyund
172 in tle Woild Bunk und IFCs Ease
of Doing Businessiunking.Tlenumbei
ollouislusnotlullensincetlestudy
beguneigltyeuisugoundiemuins
ut282louis,wliletlenumbeiol
puymentslusiemuinedunclungedut
31 ieecting u luck ol electionic ling
undpuymentuciosseucloltlemujoi
tuxes.TleTotulTuxRutelusulso
consistentlybeenjustoveiS3%duiing
tlestudypeiiod.
Tleoilsectoipluysunimpoituntiole
in tle Angolun economy, cuiiently
uccountingloiovei9S%olexpoit
ievenueundovei7S%olNutionul
Budgetievenue,uccoidingtotle
Inteinutionul Monetuiy Fund. Witl
uviewtoieducingdependencyon
tleoilsectoi,tlegoveinmentis
implementingunumbeiolmeusuies
uimedutdiveisilyingtleeconomyund
incieusingtuxievenues.Tlisincludes
vuiioustuxieloimsuimedutmuking
tle Angolun tux liumewoik moie
simpleundluii.
Newluwsweiepublisleduttleend
olMuicl2012wliclclungedtle
investmentincometuxcode,tle
stumptuxcodeundtleconsumption
tuxcode.
Investment income taxTle
clungesintioduceduimtowidentle
tuxbuseloiotleiincometlutwus
notsubjecttotuxinpiioilegislution
(e.g.inteiestliomtieusuiybondsund
bunkuccounts).Tlisnewiegimeulso
ubolislessomeexemptionsgiunted
pieviouslyundincludesteiiitoiy
iulesloitleupplicutionolinvestment
incometux.Tlepenultiesupplicuble
luveulsobeenupduted.
Stamp taxUndeitlenewstump
tuxcode,seveiulpiecesollegislution
luvebeeniepeuledustleyuieno
longeiupplicuble.Tleluwisnow
cleuieiontleiulesielutingtotle
ussessment,settlement,exemptions
undcompliunceobligutions.
Anolo
Newtuxieloimspiovideustepintleiigltdiiection
Pedro Calixto
PwC Angola
Consumption taxMujoiclunges
weiemudetointioducenewseivices
tlutwillbesubjecttotlistuxulong
witlussociutednewpioceduies
loiussessmentundpuyment.
Otleiclungesielutetoensuiing
tlutexemptionsuvuilubleontle
impoitutionolgoodsuieulsogiunted
loitlesumelocullypioducedgoods.
Finully, clunges luve been mude
tocluiilytleiesponsibilityloitle
puymentolconsumptiontuxtoensuie
tlutitlieswitltlepioduceioisuppliei
olgoodsoiseivicepiovidei,iutlei
tlun tle nul consumei.
Fuitlei clunge to tle tux code is
expectedintlelutuieincluding,
updutestotlegeneiultuxcode,tletux
pioceduiecode,tlecoipoiuteincome
tuxcode,tleindividuulincometux
code,undtlebigtuxpuyeisiegime.
Someoltlemostielevuntclunges
expectedinclude:
A ieduction in tle iute (3S%
to30%)undunincieuseintle
witlloldingiuteto6.S%;
Additionul disullowunce ol
ceituincosts(e.g.,inteieston
sluieloldeislouns);
Clungestotledepieciutioniules
undiutes;
A neutiul iegime loi meigeis; und
Newtiunsleipiicingiegulutions
undgiouptuxutioniules.
Personal income tax
Cluiicution ol non tuxuble limits
loiseveiultypesolincome;
Additionul cutegoiies ol income to
becometuxuble;und
Vuiiousumendmentstotle
tuxiutes.
Tlegoveinmentisulsoinvestingin
updutingitstuxudministiutionus
puitoltletuxieloimpiocess,but
tleieisstillmucltobedoneund
someoltlepiioiitiesloitlisinclude
betteipiepuiutionundtiuiningol
tuxuutloiitiesstull,moieguidunce
loituxpuyeispublisledbytletux
uutloiities,tleintioductionoltux
couitstoiesolvedisputesbetween
tuxpuyeisunduutloiities,pioceduies
toullowloituxielunds,undtle
intioduction ol electionic ling
undpuyment.
53.2%
282
31
Total Tax Rate Number of hours Number of payments
Tle Aliicu luuncl ol tle Puying
Tuxes2012publicutiontookplucein
Muuiitius. Tle Finunce Secietuiy ol tle
Ministiy ol Finunce wus tle muin guest
speukei,witlluitleicontiibutions
liomiepiesentutivesoltleMuuiitius
Revenue Autloiity (MRA) und tle
Woild Bunk und IFC.
In lis speecl, tle Finunce Secietuiy ie-
iteiutedtlegoveinmentscommitment
to impiove tle nunciul enviionment
inMuuiitiustliouglgieuteipublic
piivutesectoiintei-uctionsund
ulsoinvitedtlevuiiousstukeloldeis
tosluietleiiideusloiubettei
tuxsystem.
IntleNutionulBudget2012(wlicl
wus leld u week beloie tle Aliicu
luuncl event), tle Ministei ol Finunce
und Economic Development (MoFED)
unnounceduseiiesolmeusuiestolelp
boosteconomicgiowtl.Tleubolition
oltlesoliduiityincometux(SIT)us
welluscupitulguinsTuxontlesule
olimmovublepiopeities(intioduced
uyeuieuiliei)weietwomeusuies,
umongstotleis,wliclweieuimed
to stimulute investment. Fiom u tux
peispective,tleubolitionoltleSIT
ondividendeliminutedtleeconomic
doubletuxutionolincomeundlelped
toiestoieMuuiitiuscompetitiveness
us u juiisdiction. Tle MoFED ulso
unnouncedtluttletuxexemptionloi
compunies in tle Fieepoit Zone would
be extended to un indenite peiiod us
unincentivetoieinloiceundenlunce
tlelieepoitundlogisticsplutloimusu
pilluiloitleeconomicgiowtl.
Mouritius
Committedtosluiingideusloiubetteituxsystem
Tony Leung Shing
PwC Mauritius
Muuiitius is un inteinutionul nunciul
centiewleietletieutynetwoik
pluysunimpoituntioleinuttiucting
investmentsund,witltleemeigence
ol Aliicu us tle next investment
destinution, tle MoFED unnounced
plunstouppointumbussudoistoussist
witltlenegotiutionolnewtuxtieuties
witl Aliicun countiies.
Wlilstpoliciesweiebeingintioduced
toboostgiowtl,otleimeusuies
weieulsobeingtukentosimplilytux
udministiution in Muuiitius. Amongst
otleis,compunieswitlununnuul
tuinoveiexceedingMUR2million
uienowiequiiedtosubmittleiitux
ietuinsundpuytuxelectionicully.
Electionic ling ol PAYE ietuins
lusulsobeenmudemundutoiyloi
compunieswitl2Semployees(S0in
piioi yeuis). Tle benets ol electionic
ling luve, ol couise, been iecognised
loiouicusestudycompunytliouglout
tleeigltyeuisoltlePuyingTuxes
study.Tlesemeusuiesextendtle
benets to even smullei compunies. As
ieguidstotlepiocessingoltuxielunds
by tle MRA, tle luw wus umended to
imposeinteiestcluigesiniespectolull
ielundspiocessedbeyondsixmontls.
TleTotulTuxRuteinMuuiitiusis
28.S%.Meusuiesluvebeenintioduced
duiing2012wliclslouldieduce
tleTotulTuxRutegoingloiwuid.
Howevei,itmuytukesometimeloi
tlese meusuies to ltei tliougl tle
system und loi benets to be ieulised.
As Andie Bonieux, Senioi Puitnei ol
PwCMuuiitius,mentionedduiing
lis opening speecl ut tle 2012 Aliicu
luuncl,tleubolitionolseveiultuxes
inMuuiitiusslouldleudtoubettei
iunkingintlelutuie.
28.5%
161 7
SieiiuLeonelusseensome
impiovementintuxudministiution
oveitlepeiiodoltlestudy(u
lullintlenumbeiollouisby42)
butoveitlelustlouiyeuistle
compliunceindicutoisluveiemuined
ielutivelystuble.
TlemujoiieloimloiSieiiuLeone
lusbeentleintioductionolugoods
undseivicestux(GST)in2010to
ieplucetlesulestuxiegime,undtlis
signicuntly ieduced tle Totul Tux Rute
loitlecusestudycompuny.
TleintioductionoltleGSTsuwtle
TotulTuxRutediopliom23S.6%to
32.1%,tleiutewliclstilluppliesin
tle2013study.Tlisismuinlybecuuse
undeitlenewGSTiegime,tlecuse
studymunuluctuieiisubletocluim
udeductionloiinputtuxincuiiedon
puiclusesuguinstoutputtuxpuyuble
onsules,insteudoluddingtotle
costsincuiiedusexistedundeitle
iepeuledsulestuxiegime.Tleold
iegimedidnotluveupiovisionloi
mukingtliscluimundtlecusestudy
munuluctuieiludtoiecoveitlesules
tuxcomponentbyincieusingitsselling
piicetocustomeis,ultlouglundeitle
cusestudycompunyussumptionswitl
tle xed piot muigin it wus unuble to
dotlis.
SierroLeone
TleintioductionolGSTisustuit,butscopeloiluitlei
ieloimiemuins
George Kwatia
PwC Ghana
Tle new GST Act lus ulso eused tux
udministiutionundcompliunceloi
botl tle Nutionul Revenue Autloiity
undtletuxpuyei,inteimsoltle
numbeioltuxesusGST(usingletux)
nowieplucesunumbeioltuxessucl
usenteituinmenttux,impoitsulestux
undpiolessionulseivicestux.Wlile
tlisdidnotdiiectlyullecttlecuse
studycompuny,tlisdidluveunimpuct
onotleituxpuyeis.
Otleiclungesintletuxluwduiing
tlemostiecentyeuiincludedu
wideningoltleindividuultuxbunds
undtleintioductionollegislutionto
suppoit u specic GST Relund Account
toielundtleoveipuymentolGST
totuxpuyeis.
Despitetleseclunges,tleieisstill
scopeloiluitleiimpiovementsto
bemudetotletuxudministiution
piocess.Tlenumbeiollouistlecuse
studycompunyspendsincomplying
witlulltleupplicubletuxesinSieiiu
Leoneut3S7,exceedstlesub-Suluiu
Aliicu uveiuge ol 319 louis und is well
ubove tle globul uveiuge ol 267. Also,
ultlougltlenumbeioltuxpuyments
peiyeuiinSieiiuLeone,ut33intle
luteststudy,isbelowtlesub-Suluiu
Aliicu uveiuge ol 39, tleie is scope
toieducetlenumbeiolmundutoiy
oistututoiypuyments.Cuiientlyu
tuxpuyeilustomuke12sepuiute
montllypuymentstliougltleyeui
ut dilleient olces in iespect ol GST to
tle NRA, und unotlei set ol puyments
totleNutionulSociulSecuiityund
InsuiunceTiust.Stieumliningtlis
couldulsoieducetletotullouis
spenttocomplywitltlestututoiy
puymentsundluitleiieducetletux
udministiutionbuidenontuxpuyeis.
Goingloiwuid,tlePuyingTuxesstudy
willcontinuetobiingdiscussionson
topicultuxissuesinSieiiuLeoneto
tleloie,notonlyuddiessingtleneed
toeusetleudministiutionoltuxes
buttolelpinloimtledebutewitl
goveinmentunditsuimolbioudening
tletuxbuseundincieusingtle
goveinmentsievenue.
32.1%
357
33
Ugunduiunks93outol18Scountiies
intlisyeuisPuyingTuxesstudy.Tle
countiyissecondonlytoRwunduin
tle Eust Aliicun iegion.
Tletimetocomplytlutouicusestudy
compunytukestocomplywitlitstux
ulluiisinUgunduluslullenbyonly
24louisoveitleeigltyeuisoltle
study.Tlegoveinmentinitsbudget
speecl loi tle 2012/2013 nunciul
yeuicommittedtoimpiovingitstux
udministiution.
Oveiull,tleieloimsimplementedby
tlegoveinmentluvebeenpositive
undusuconsequenceitislopedtlut
next yeuis iesults will ieect tlis tiend
byslowingsomeimpiovementintle
numbeiollouisundtlepuyments
indicutoi.Tleieloimsundeituken
includetleintioductionolelectionic
ling ol tux ietuins. Tlis wus oiiginully
intioducedtowuidstleendol2009us
upilotpioject,stuitingwitluselect
numbeioltuxpuyeis.In2010,ull
luigetuxpuyeisweieuddedontotle
electioniciegistei.Tleieultei,ullotlei
tuxpuyeicutegoiiesweieincoipoiuted,
ontotleelectioniciegisteisotlut
toduyulltuxpuyeisuieiequiiedtouse
electionic ling.
Uondo
Electionic ling euses tle compliunce buiden
Francis Kamulegeya
PwC Uganda
55 Paying Taxes 2013. PwC commentary * East African Community includes: Burundi Kenya, Rwanda, Tanzania, Uganda
WliletleTotulTuxRutelusbeen
ielutivelystubleoveitleeigltyeuis
oltlestudytleiuteincieusedintle
mostiecentpeiiod.Tlegoveinment
isudoptingvuiiouspolicieswlicluie
designedtowidentletuxbuseund
ulsotoimpiovetuxcollection.
A good exumple is tle pioposul to
ievisetletuxtliesloldundtuxbunds
loiindividuulincometuxliom
USls130,000(USDS2)to
USls23S,000(USD94)peimontl,
uswellusincieusingtlenumbeioltux
ugentsmundutedtocollectwitllolding
tuxonpuymentstopeisonsinUgundu
loisuppliesolgoodsundseivicesliom
139to2S4ugents.Tleseieloimsluve
beeninitiutedintlecuiientyeuiund
soluveyettomukeunimpuctontux
ievenuesundtuxudministiution.We
expecttoseetleliuitsoltleseieloims
impuctingtleUgunduneconomy
positivelyoveitlenextlewyeuis.
Ugunduintioducednewtiunslei
piicingiegulutionsinJuly2011wlicl
luveunimpuctonielutedpuity
tiunsuctions.Piicesolielutedpuities
uieexpectedtobecompuiubletotlose
estublisledutuimslengtlbetween
unielutedbuyeiundselleionnoimul
commeiciulteims.
Inconclusiongiventleievenuetuigets
set loi tle Ugundu Revenue Autloiity
wlicluieincieusingonuyeuilybusis,
itisunlikelytluttlegoveinmentwill
iemoveunytuxesoievenieduceiutes
loitlosetuxeswliclcuiientlyexist.
Tlegoveinmentislookingtocollect
68%olitslundingiequiiementsloi
Finunciul Yeui 2013 liom domestic
souiceswitltuxievenuecontiibuting
97%oltlis.
37.1%
213 31
Thereionolonolyses
Asiu Pucic
17
Tleuveiugesloiulltliee
indicutoisuiebelowtle
globuluveiuge.
Tleuveiugetimetocomply
intleiegionislow.Onlyten
economiestukemoietimetlun
tleglobuluveiuge.
OnlytleMiddleEustlusun
uveiugeTotulTuxRutewliclis
lowei tlun AsiuPucic.
Tletienddutuoveitlelust
eigltyeuisslowsusteudybut
modeiuteimpiovementucioss
ull tle tlieeindicutois.
Onuveiugecoipoiuteincome
tuxistleluigestelementoltle
TotulTuxRuteloitleiegion.
17
The following economies are included in our analysis of Asia Pacic: Afghanistan; Australia;
Bangladesh; Bhutan; Brunei Darussalam; Cambodia; China; Fiji; Hong Kong SAR; China; India;
Indonesia; Japan; Kiribati; Korea, Rep.; Lao PDR; Malaysia; Maldives; Marshall Islands; Micronesia,
Fed. Sts.; Mongolia; Nepal; New Zealand; Pakistan; Palau; Papua New Guinea; Philippines; Samoa;
Singapore; Solomon Islands; Sri Lanka; Taiwan; China; Thailand; Timor-Leste; Tonga; Vanuatu; Vietnam
HonKon
SAR,Chino
Countiyuiticle,
puge6S
Thoilond
Countiyuiticle,
puge71
Sinopore
Countiyuiticle,
puge69
NewZeolond
Countiyuiticle,
puge67
58 7KHUHJLRQDODQDO\VHV$VLD3DFLF
The 2013 tox prole
Figuie 2.21 cleuily slows tlut
coipoiuteincometuxuccountsloiu
luigeipiopoitionoltleTotulTuxRute
undtletimetocomplytlunistlecuse
inmostotleiiegions.
TotolToxRote
Tle uveiuge Totul Tux Rute loi tle Asiu
Pucic iegion ut 36.4% is well below
tlewoilduveiugeol44.7%,undtle
MiddleEustistleonlyiegionwitlu
loweiuveiugeiute.Onlynineoltle36
countiiesintleiegionluveuTotulTux
Rutewliclisubovetlewoilduveiuge
(see Figuie 2.22). Piot tuxes compiise
tleluigestelementoltleTotulTux
Ruteintleiegionwitl24outoltle
36economies(
2
/3)luvingucoipoiute
incometuxwliclistleluigest
component ol tleiiiute.
Figure 2.21: The prole of taxes in Asia Pacic
Prot taxes
Labour taxes
Other taxes
42%
44%
36%
33%
23%
31%
48%
29%
14%
Figure 2.22: The Total Tax Rates in Asia Pacic
Vanuatu
Timor-Leste
Brunei Darussalam
Samoa
Cambodia
Hong Kong SAR, China
Malaysia
Mongolia
Solomon Islands
Tonga
Singapore
Korea, Rep.
Maldives
Nepal
Kiribati
Lao PDR
New Zealand
Indonesia
Vietnam
Taiwan, China
Bangladesh
Pakistan
Afghanistan
Fiji
Thailand
Bhutan
Papua New Guinea
Philippines
Australia
Japan
Sri Lanka
Micronesia, Fed. Sts.
India
China
Marshall Islands
Palau
Asio Pocicoveroe(36.4%)
Prot taxes
Labour taxes
Other taxes
4.5 3.9 8.4
14.9 0.2 15.1
8.3 8.5 16.8
11.9 7.0 18.9
18.9 0.1 3.5 22.5
17.6 5.3 0.1 23.0
7.5 15.6 1.4 24.5
10.2 12.4 2.0 24.6
15.0 8.5 1.8 25.3
24.3 1.4 25.7
6.0 17.0 4.6 27.6
15.2 13.2 1.4 29.8
13.5 7.9 9.3 30.7
17.2 11.3 3.0 31.5
23.3 8.5 31.8
24.8 5.6 2.9 33.3
28.8 3.7 1.0 33.5
23.7 10.6 0.2 34.5
11.6 22.6 0.3 34.5
12.7 18.6 3.5 34.8
25.7 9.3 35.0
17.9 15.1 2.3 35.3
36.4 36.4
27.3 10.2 0.1 37.6
28.1 5.7 3.8 37.6
36.3 4.5 40.8
22.0 11.7 8.5 42.2
21.1 11.3 14.2 46.6
26.0 20.3 1.2 47.5
26.9 17.4 5.7 50.0
1.6 16.9 31.6 50.1
6.8 51.9 58.7
24.6 18.2 19.0 61.8
6.2 49.6 7.9 63.7
11.8 53.1 64.9
65.8 9.3 0.6 75.7
Timetocomply
Tleuveiugetimetocomplyloitle
iegionut231louisismucllowei
tluntlewoilduveiugeol
267 louis (see Figuie 2.23). Only
10economies(28%)spendmoie
timetluntlewoilduveiuge,undtlis
includestwoeconomies,Pukistunund
Vietnumwleietlenumbeiollouis
ispuiticuluilyligl,S60und872
iespectively wlicl luve u signicunt
impuctontleiegionuluveiuge.Tle
signicunt umount ol time iequiied
to deul witl tleii VAT systems is
u signicunt diivei in tlese two
economies.Ouicusestudycompuny
inPukistunloiexumple,spends480
louis complying witl VAT wleie it
lustocomplywitltlieelevelsol
goveinment(ledeiul,stuteundlocul)
undmukemultiplepuymentsloitlese
tuxes.InVietnum320louisuiespent
on VAT wlicl is u consequence ol
tleliglleveloldetuileddisclosuie
iequiiedintlemontllyundunnuul
ietuins.InVietnumtlecompunyulso
spends33Slouisonitslubouituxes
undsociulcontiibutions,tleliglest
intleiegion,tlisuiisingliomtle
need to comply witl ve tuxes levied
ongiosssuluiiesundunobligution
on employeis to le unnuul peisonul
incometuxietuins,wliclisunusuul.
Figure 2.23: The time to comply in Asia Pacic
Solomon Islands
Singapore
Brunei Darussalam
Australia
Kiribati
Vanuatu
Marshall Islands
Malaysia
Palau
New Zealand
Fiji
Tonga
Cambodia
Mongolia
Philippines
Korea, Rep.
Papua New Guinea
Taiwan, China
Samoa
India
Maldives
Sri Lanka
Indonesia
Thailand
Bhutan
Afghanistan
Timor-Leste
Bangladesh
Nepal
Japan
China
Lao PDR
Pakistan
Vietnam
Asio Pocic overoe(231)
Labour taxes
Consumption taxes
50 28 78
8 30 42 80
32 10 40 82
66 30 96
37 18 54 109
48 72 120
24 96 120
96 32 128
96 32 128
26 77 30 133
46 96 142
34 59 59 152
42 61 60 163
8 12 144 164
23 84 66 173
57 63 72 192
42 38 113 193
94 74 39 207
153 8 46 207
161 27 33 221
48 96 80 224
45 93 105 243
100 91 61 252
16 96 142 254
75 94 90 259
160 48 56 264
250 24 274
77 120 78 275
132 144 276
140 162 302
120 84 122 326
155 140 35 330
74 152 112 338
138 42 182 362
40 40 480 560
217 335 320 872
Numberofpoyments
Tle Asiu Pucic iegion lus un uveiuge
ol24.8puymentspeiyeui,wlicllike
tleotleitwoindicutoisisbelowtle
woilduveiugeol27.2puyments,but
tleiungeiswideundtleeconomies
uiespieudevenlytliougltlisiunge
(see Figuie 2.24). A luck ol electionic
ling und puyment in tle mujoiity ol
economiesintleiegionloiluboui
tuxesundsociulcontiibutionsulong
witlmultipleotleituxesinmuny
keepstleuveiugenumbeiolpuyments
closetotlewoilduveiuge.
Singapore
China
Kiribati
Bhutan
New Zealand
Korea, Rep.
Australia
Palau
Taiwan, China
Malaysia
Japan
Maldives
Timor-Leste
Afghanistan
Bangladesh
Marshall Islands
Thailand
Brunei Darussalam
Tonga
Vanuatu
Vietnam
India
Papua New Guinea
Solomon Islands
Fiji
Lao PDR
Nepal
Samoa
Cambodia
Mongolia
Pakistan
Philippines
Indonesia
Sri Lanka
Asio Pocic overoe (24.8)
Prot taxes
Labour taxes
Other taxes
1 1 1 3
1 1 3 5
2 1 4 7
5 2 7
2 2 4 8
1 2 5 8
1 2 7 10
1 4 6 11
4 4 3 11
2 3 7 12
2 2 9 13
2 2 10 14
3 8 6 17
5 12 1 18
1 12 7 20
5 15 20
16 5 21
4 17 21
2 13 7 22
1 24 2 27
1 12 18 31
12 19 31
6 12 14 32
2 24 7 33
1 13 19 33
5 12 16 33
5 14 15 34
4 12 18 34
4 12 18 34
5 24 8 37
12 12 16 40
12 12 17 41
5 25 17 47
1 36 10 47
13 24 14 51
5 24 32 61
Figure 2.24: The number of payments in Asia Pacic
TheTrends
Tletienddutuoveitlelusteiglt
yeuisslowsusteudybutmodeiute
impiovementuciossulltletliee
indicutois.Tleuveiugenumbeiol
puymentslusieducedby2.3,tleTotul
TuxRuteby2.6%,wliletletimeto
complyluslullenbyS2louis(see
Figuie 2.2S).
Timetocomply
Belowuiesomeexumplesoltle
ieloimsintioducedintlisiegion.
InClinu,meusuiesluvebeen
intioducedtoencouiugetleuseol
online ling, und clunges luve ulso
beenmudetotletuxluwstoimpiove
cluiityintletuxlegislution.Tle
use ol online ling und puyment loi
vuiious tuxes incieused tle elciency
ol tle tux ling signicuntly und suved
tletuxpuyeistimeloicompliunce.
Coupledwitlvuiiousieloimson
coipoiuteincometux,Clinulus
ieduceditscompliuncelouisliom832
inPuyingTuxes2004to338inPuying
Tuxes2011.
Vietnumlusimplementedvuiious
ieloimsiniecentyeuis,wliclluve
ieducedtletimeiequiiedtocomply
loi VAT und coipoiute income tux.
In 2010, two deciees on VAT und
coipoiuteincometuxweiepussed
wliclpiovidedguidunceonvuiious
gieyuieusoltleluwundtliscoupled
witludvuncementinuccounting
soltwuieullowedcompliuncetimeto
lullby69louis.
As u geneiul tleme loi tle iegion, tle
intioductionolellectiveelectionic
systemsinulmostonetliidoltle
economiesluslelpedtoieduce
tlenumbeiollouisiequiied
loicompliunce.
Figure 2.25: The indicator trends for Asia Pacic
2004 2005 2006 2007 2008 2009 2010 2011
40
30
20
10
0
400
300
200
100
0
Total Tax Rate
Payments
Time
Time (Hours) Percentage/Payments
Numberofpoyments
Clinuuguinpiovidesugoodexumple
wleiemeusuiesluvebeenintioduced
toieducetlenumbeiolpuyments.
Tlepuymentsluveieducedliom3S
inPuyingTuxes2006tojust7intle
mostiecentstudy,undtlisismostly
tleiesultoludoptingjointpuyment
meclunismsloivuiiouslubouituxes
undsociulcontiibutionsundulsotle
intioduction ol electionic ling loi ull
tuxes.IndiuundMuluysiuluveulso
ieducedtleiinumbeioltuxpuyments,
botlluveieducedtlenumbeiby22.
Tleubolitionolieulpiopeityguins
tux in Muluysiu in Apiil 2007 und tle
ubolition ol tle liinge benet tux in
Indiulelpedtleseieductionsulong
witltleimplementutionolonline
ling systems und tle ubility to muke
jointpuyments.
TotolToxRote
Clinulusludtleluigestieductionol
tleTotulTuxRuteintleiegion.Tle
TotulTuxRuteieducedliom80%in
PuyingTuxes2006to63.7%intle
mostiecentstudy.Tleieluvebeen
unumbeiolieloimswliclieduced
tleTotulTuxRuteincludingclunges
mudeloiullcompunies(domesticund
loieign) to intioduce u unied iute
ol2S%(lullingliom33.3%)liom
Junuuiy2008.
InMongoliuvuiiousieloimsincluding
tleieductionintleemployeis
sociulsecuiitycontiibutionsundtle
intioductionolpiogiessivecoipoiute
incometuxiutesluvediivenulullin
iecentyeuissotluttleTotulTuxRute
luslullenliom39.8%inPuyingTuxes
2006to24.6%inPuyingTuxes2013.
WhothoshoppenedintheMoldives?
Itiswoitlmentioningtleclungestlutluvetukenpluceintle
Muldives.SincetlebeginningoltlePuyingTuxesstudyin2006,tle
Muldivesludsecuiedtlenumbeionepositionintleeuseolpuying
tuxesiunking.Intlemostiecentstudytlispositionlusclunged.
TleTotulTuxRuteloitleMuldiveslusincieusedby21.4%liom
9.3%to30.7%,tlenumbeiollouistocomplyliom0to2S2,und
tlenumbeiolpuyment,liom3to17.
Tle intioduction ol u new business piots tux, u goods und seivices
tux,undtleimplementutionolmundutoiypensioncontiibutionsuie
iesponsibleloitleclunge.
Tle new business piots tux iequiies two inteiim puyments und one
nul puyment eveiy yeui, us well us 100 louis pei unnum to comply
witltletux.
TlegoodsundseivicestuxwusimplementedinOctobei2011und
loitle3montlsin2011tlecompliuncetimewus61louisund
iequiiedtlieepuyments.Tlesenumbeisuielikelytoincieusenext
yeui.Tlepensionlundcontiibutionsuieduemontllybutsincetley
weieonlyintioducedinMuyol2011only8puymentsund91louis
uiepiesentlyiecoidedintlecompliunceindicutois.
TleMuldiveseconomyludbeensuppoitedbyudynumictouiism
sectoiloimunyyeuisbutexteinulluctoisincludingtleclunging
globuleconomiclundscupeundtleimpuctoltle2004tsunumi
piompteduneedloiclunge.Tleieloimsintioduceduieugood
exumpleolmeusuiestlutsomegoveinmentsmuyneedtotuke
inoideitouduptunddiveisilytleiieconomicbusetosecuie
sustuinubletuxievenuesundtolelpencouiugeundsuppoit
economicgiowtl.
LustyeuitlePuyingTuxesstudywus
olciully luuncled in Hong Kong
SAR, Clinu. Following tle luuncl,
Hong Kong SAR, Clinu lus kept its
momentuminmuintuiningitsglobul
competitiveness. Foi yeuis, tle
PuyingTuxesstudylusconsistently
demonstiutedtlutitlusmuintuined
usimpletuxsystemwliclmukesit
iseusyloibusinesstocomply.Tle
tuxcostloibusinessesisumongsttle
lowestintlewoildundtlebuidenol
tuxcompliunceisulsoinsubstuntiul
wlencompuiedtomostotlei
juiisdictionssuiveyed.
TleTotulTuxRuteloitlecuiient
yeuiol23%istlesumeustlutloi
lustyeui,muinlyduetotleubsence
ol uny signicunt clunges in tle
tuxluwswliclwouldimpucttle
ciicumstuncesoltlecusestudy
compuny. A lew tux meusuies luve,
lowevei,beenimplementedoi
pioposedin2012.Topiomotetle
useolintellectuulpiopeityiiglts
undstimulutetledevelopmentol
cieutiveindustiiesinHongKong
SAR, Clinu, legislution intioducing
u tux deduction ovei u peiiod ol ve
yeuisloicupitulexpendituieontle
puicluseoliegisteiedtiudemuiks,
copyiigltsundiegisteieddesignswus
enuctedinJune2012.Tlenewtux
deductionisuvuilubleliomtleyeui
olussessment2011/12.Ontleotlei
lund,businesseswitlemployees
euiningmoietlunHKS20,000umontl
will nd tlut tleii cost ol liiing lus
incieusedsligltlysince1June2012,us
tlecupontleemployeismundutoiy
piovidentlundcontiibutionsloi
employeeslusbeenincieusedliom
HKS1,000toHKS1,2S0peimontl.To
stiengtlen Hong Kong SAR, Clinus
position us un inteinutionul nunciul
centie,tlegoveinmentluuncled
uconsultutionpupeionIslumic
nunce in Muicl 2012. A numbei ol
umendmentstotletuxluwsweie
pioposedintlispupeiwitltleuim
ol pioviding u level pluying eld
betweenIslumicundconventionul
bondsinteimsolincometuxund
stump duty implicutions. A bill on tlese
umendmentswusintioducedtotle
legislutivebodyinSeptembei2012loi
its consideiution unduppiovul.
HonKonSAR,
Chino
A clunging tux lundscupe to muintuin u business
liiendlyenviionment
Peter Yu
PwC Hong Kong SAR, China
Iniecentyeuis,mucloltle
goveinmentslocuswitlieguidtotux
policylusbeenonexpundingHong
Kong SAR Clinus tux tieuty netwoik
undstiengtleningitsco-opeiution
witlinteinutionultuxutionbodies.
Witltlenumbeioltuxtieuties
incieusing liom ve in 2008 to twenty
ve in 2012, moie iesouices luve been
devotedtotletuxtieutydivisionoltle
Hong Kong SAR, Clinu Inlund Revenue
Depuitmentinunticiputionolun
incieusedumountolwoikuiisingliom
implementution ol tle tieuties. In Apiil
2012,unudvuncepiicinguiiungement
piogiumme wus olciully luuncled.
Moieovei, tle Hong Kong SAR, Clinu
goveinmentluuncleduconsultution
piocessonexclungeoltuxinloimution
inMuy2012.Tlispiocessisuimed
utsolicitingviewsliomvuiious
stukeloldeisonwletleiumendment
slouldbemudetotletuxluwstoputin
pluceulegulliumewoikwliclwould
enubleittoenteiintoTuxInloimution
Exclunge Agieements.
Wlile tle Hong Kong SAR, Clinu
domestictuxenviionmentisexpected
tomuintuinitscompetitiveness,
expundingtleiituxtieutynetwoik
willluitleiuttiuctmultinutionul
enteipiises to do business leie. As u
consequence,tieutyupplicution,undin
puiticuluiissuesuioundtleinteiuction
betweendomestictuxluwsundtieuty
piovisions,willbecomeincieusingly
impoituntloimultinutionul
enteipiisesdoingbusinessinHong
Kong SAR, Clinu. Unloitunutely,
duetotleuniquetuxsystem,tleie
uieconsideiubleunceituintiesin
tleseuieusbutitislopedtluttle
InlundRevenueDepuitmentcunlelp
muintuin oi enlunce Hong Kong SAR,
Clinuscompetitivenessbypioviding
moieguidunceundgieuteicluiitywitl
ieguidtosuclissues.
23.0%
78 3
NewZeolond
Publicconsultutiontopiomotegoodtuxpolicy
John Cuthbertson
PwC New Zealand
Tle New Zeulund goveinment lollows
upiincipleduppioucltotuxpolicy
loimulutiontliougltlegeneiictux
policypiocess.Tlepiocessinvolves
issuingpublicdiscussiondocuments
undseekingsubmissionsbeloie
intioducingtuxlegislution.New
Zeulund geneiully lollows u bioud
bused,lowiuteuppioucltotuxpolicy.
Tlisuppioucl,ulongwitluligl
stunduidoltuxudministiutiontliougl
tleInlundRevenue,lusleudtotle
piesentsystembeingwelliecognised
uscompielensiveundcoleient.
New Zeulunds lust mujoi iound ol
tuxieloimsweieunnouncedintle
goveinments2010Budget,wleie
peisonulundcoipoiuteincometux
iutesweieieducedundconsumption
tux(GST)incieused.Tletuxswitcl
ludseveiulobjectives.Sustuinubility
oltletuxbusewusimpiovedby
decieusingieliunceonpeisonul
incometuxesliominteinutionully
mobilesuluiyundwugeeuineis,und
incieusingieliunceonconsumption
tuxwliclislessmobile.Loweiing
peisonulincometuxiutesulsoieduced
distoitionbyuligningtleliglest
peisonulincometuxiutesundtle
tiust income tux iute. Finully, tle New
Zeulund goveinment uimed to incieuse
inteinutionulcompetitivenessund
pioductivitybydecieusingtle
coipoiutetuxiute.
Tlesetuxieloimsluvecontiibuted
totlelulloltleTotulTuxRuteund
tletimeindicutoi.Tledownwuid
tiend ol tle Totul Tux Rute ieects
tleiecentdecieusesintlecoipoiute
tuxiuteliom33%to30%undto
28%loitle2009und2012income
yeuisiespectively.Tletimeindicutoi
ulsolelltlisyeui,usudditionul
louisullocutedtotletimespentby
tuxpuyeistopiocesstleGSTiute
clungeincieuseintlepiioiyeui,
weieexcludedliomtlecuiientyeui
culculutionoltimespent.
Tle New Zeulund tux system lus
piovediesilientinligltoldomestic
undglobuleconomicconditions.
Howevei, tle New Zeulund tux system
isnotwitloutissuesundlimitutions.
TleInlundRevenueluvewonu
numbei ol iecent ligl piole couit
cusesontlegeneiuluntiuvoidunce
iule (GAAR). Businesses now luce
udegieeolunceituintyustowlen
legitimutetuxplunningbecomestux
uvoidunce.Sometuxpiolessionuls
believetluttletuxuvoidunce
pendulumlusswungtooluiintle
InlundRevenuesluvouiundtluttlis
muyultimutelyiequiielegislutive
inteivention.Legislutiveinteiventionis
notcuiientlyupiioiityloitleNew
Zeulund goveinment given its cuiient
ievenueiequiiements.
Inteiestingly tle New Zeulund mediu
luvelocussedontleiecenttux
uvoiduncecuses,suppoitingtleInlund
Revenuesviewtluttuxpuyeisslould
puytleiiluiisluieoltuxinoideito
suppoitgoveinmentsociulspending
inuieussuclusleultlundeducution.
Tlis lus inuenced public opinion
uguinsttuxplunning,puiticuluilyby
luigecompuniesundtleweultly.
Doing Business iunks New Zeulund
eigltlintleOECDloieuseolPuying
Tuxesbuttlisunulysisisbused
onucompunywliclisielutivelyluige
by New Zeulund stunduids. Smull und
mediumsizedenteipiises
(SMEs, dened us luving 19 oi lewei
employees)mukeup97%olNew
Zeulund businesses, yet tle New
Zeulund income tux system does
notdistinguislbetweentleluigest
multinutionulundtleSME;uone
size ts ull uppioucl is udopted.
TlismeunstlutSMEsuieiequiied
tocompletetlesumeincometux
compliunceiequiiementsusluigei
moiecomplicutedbusinesses.TleNew
Zeulund Institute ol Cluiteied
Accountunts ieleused discussion pupeis
in2009und2012suggestinguless
complextuxiegimeloiSMEs.
Tle New Zeulund goveinments
stutedobjectivetoietuintosuiplus
by2014/201Slusputpiessuieontle
InlundRevenuetoincieusetuxievenue
tliouglstiicteienloicementoltle
cuiienttuxlegislution,moie
uctivepuisuitoltuxdebt,undclosing
legislutivelooploles.TleInlund
Revenuelusincieuseduudituctivity
puiticuluilyintlepiopeitysectoi,tle
liddeneconomy,undcioss-boidei
tiunsuctions, including nuncing.
33.5%
152
8
As in piioi yeuis, Singupoie continues
tobeuliont-iunneiintlePuying
Tuxes2013study,iunkingSoutol
18Soltleeconomiessuiveyed.Tle
Singupoiegoveinmentpiidesitsellon
tleestublislmentundmuintenunceol
ubusinessliiendlyenviionment,und
tlelocultuxsystemisunintegiulpuit
oltlutmindset.
Onecoietuxpeituxbuse,ulow
numbeiollouisneededtocomply
unduligllycompetitiveTotulTux
Rutecontinuestobetlelullmuik
olSingupoiesstubleundsimpletux
system.TlisiskeytoSingupoies
positioningusunuttiuctivelocutionloi
investmentundentiepieneuislip.
Eveiconsciousolcompetitiveness
inulust-clungingwoild,Singupoie
lusnotiestedonitsluuielsdespite
itsstelluitiuckiecoid.Buildingonu
stiongloundution,Singupoiecontinues
to seek uieus ol ienement loi tle
tuxsystem.
Vuiiousuutloiitiesengugein
discussionwitlPwCSingupoie
unnuullyonpotentiuluieusoltux
ieloimundinteinutionultuxtiends
iniesponsetotlePuyingTuxes
publicution.E-Ciiculuiscluiilyingtle
upplicutionoltuxiulesuieieguluily
intioduced und upduted. Renements
totuxietuinloimsuiemudein
iesponsetopublicleedbuckund
inteinulussessments.
Tlisevolvingsimpleundstubletux
systemlusseivedtlecity-stutewellloi
munyyeuis.HoweveiustleSingupoie
economymutuies,policy-mukeisluve
piogiessivelymoveduwuyliombioud-
busedinitiutivestoseekieloimin
tuigeteduieusloimuximumimpuct.
Tlesetuigetedieloimsluvebeen
intioduced in u vuiiety ol wuys. Foi
exumple,unuiiuyoltuxincentivesloi
giowtlindustiiessuclusenlunced
oiluitleideductionsloiexpendituie
ielutingtodesiiubleuctivitiesis
uvuiluble.Tleseincentivesluveun
impuctonbusinessesTotulTuxRutes.
TlePioductivityundInnovutionCiedit
(PIC)sclemeisucuseinpoint.
Sinopore
Bioud-busedoituigetedieloim?LookingbeyondPuyingTuxes
David Sandison
PwC Singapore
Nonetleless,limitutionsintlePuying
Tuxesmetlodologymuynotullowtle
benets ol sucl tuigeted ieloims to
be ieected in Singupoies iesults. Foi
instunce, u simplied tux ietuin (Foim
C-S)wusintioducedbytleSingupoie
tuxuutloiitiesuspuitolunelloitto
simplily tle ling pioceduies loi smull
compuniesundieducetletimeto
comply.Howevei,tleievenueumount
loitlecusestudycompunyexceedstle
tlieslold loi Foim C-S useis. Similuily,
Puying Tuxes xed ussumptions do not
ullowluitleituxdeductionsloimuny
specic expenses to upply.
As sucl, Singupoies position in tle
suiveycould,inluct,diopinlutuie
iunkingsinielutiontootleieconomies
wlicluiemukingbioudei-busedtux
policyclunges.Detuilediulesund
culculutionsussociutedwitltlese
Singupoiestuigetedpoliciesmuyulso
incieusebusinessestimetocomply,
uddingtotleiicompliuncebuiden.
Fuitleimoie, tle ieul test ol un
economystuxcompliuncebuidendoes
not stop witl tux ling. Tlougl some
quulitutivedutuuiegutleiedtliougl
tlestudy,tlemetlodologydoesnot
benclmuiktlepioceduiesundtime
iequiied to nulise u compunys tux
ussessment.Tleieislencelimited
inloimutionuvuilubletocompuie
Singupoiesuppiouclwitlitspeeis.
Tlisiequiiesluitleistudy.
Tuxmustundwillcontinuetopluyu
keyioleintlenutionsgiowtlstiutegy.
Reloimsmustundwillcontinue.
At times, ieloim muy come ut tle
costolincieusingtlecompliunce
buidenolbusinesses.Suclcloices,
wlileuttimesinevituble,slouldbe
weigledcuielully.Policymukeis
slouldtluslookbeyondubsolute
iesultsoltlePuyingTuxesiunkings
tocompielensivelydeteiminetle
mostuppiopiiutetuxsysteminoidei
tolucilituteSingupoiescontinuing
giowtlstoiy.
27.6%
82 5
Thoilond
Woikingwitlgoveinmenttoimpiovebusinessenviionment
Thavorn Rujivanarom
PwC Thailand
Tlelong-uwuitedieductionin
coipoiute income tux iutes wus nully
legislutedin2012.Tluilundscoipoiute
incometuxiutelusbeenieduced
liom30%to23%loi2012unddown
to20%loibotl2013und2014.No
compensutoiy incieuse in VAT oi
ieductionininvestmentincentiveswus
intioducedtominimisetleimpuct
ontlegoveinmentsievenue.Tle
TotulTuxRuteindicutoiinPuying
Tuxescuntleieloiebeexpectedto
lullinlutuieluvingbeenielutively
stubletliouglouttleyeuiscoveiedby
tlestudy.
In uddition, tle elcucy ol ling loi
tlecoipoiuteincometuxietuins
undtleiiieviewisulsoexpectedto
eusewitltleRevenueDepuitments
move to encouiuge electionic ling ol
tuxietuinsundtleissueolnewtux
identicution numbeis computible witl
electionic ling.
A study on low best to ieloim tle
RevenueCodelusbeencompleted
unditisnowintlelundsoltle
goveinment.Includedintle
iecommendutionsuieiegulutions
uddiessingtlincupitulisution,
contiolledloieigncoipoiutions,
tieutysloppingundgeneiulunti-
uvoidunceiules.
Tlus,wlileuttemptsuiebeingmude
toieducetletimespentinpiepuiing,
ling und ussessing tux ietuins, tle
tuxluwsuieexpectedtobecome
moiesoplisticutedundcomplexin
teimsolplugginglooplolesielutedto
tuxuvoidunce.
Duiingtlepustlewyeuis,tle
goveinment lus uppointed tle Olce ol
tlePublicSectoiCommission(OPDC),
wlosemissionistowoikwitltleTlui
PublicSectoi,witltleiigoveinment
ugencies,undwitltlepiivutesectoi
toimpioveTluilundsoveiullDoing
Business iunking us well us specicully
inPuyingTuxes.TleOPDCluswoiked
closelywitlvuiiousgoveinment
ugenciestoidentilypioblemuieusund
lusiequestedullielutedgoveinment
ugenciestolelpsolvetlepioblems.
Oneexumpleistlenumbeioltimes
tlut tux ietuins luve to be led und
tuxpuid.Wlileweucknowledgetlut
tleRevenueDepuitmentundtle
Sociul Secuiity Olce luve consistently
piomoted electionic tux ling und tux
puymenttoieducetletimeiequiied
loi ling tux ietuins, tleie is still moie
todoleiepuiticuluilyloiemployei
puidsociulcontiibutionswitluview
tobiingingtletimetocomply
(264louis)undnumbeiolpuyments
(22)downluitlei(loitlecuse
studycompuny).
TleOPDCoigunisesvuiiousseminuis
undwoikslopswitlgoveinment
ugencies,educutionulinstitutions
undtlepiivutesectoitodiscussund
biuinstoimtlepioblemuieusinoidei
toimpioveTluilundscompetitiveness.
A numbei ol oigunisutions, including
PwC,luvebeeninvitedtopiovide
inputtotlesewoikslops.One
consequenceistluttleRevenue
Depuitmentlusdevelopedtlee-tux
invoiceunde-ieceiptsystemsotlut
entiepieneuisluvebeenullowedto
upplyloiuppiovulliomtleRevenue
Depuitmenttoissuee-tuxinvoices
since Junuuiy 2012. As tle concept
oltlee-tuxinvoiceisstillquite
newinTluilund,unditcunnotbe
implementedwitloutuppiovul,tle
mujoiityolcompuniesinTluilund
stilldonotusetlislucilityundluitlei
woikisneededintlisuieu.
Insummuiy,tleieluvebeenmuny
impiovementsintleTluituxsystemin
iecent yeuis us u iesult ol u signicunt
elloitbytleuutloiities.Wletleitlis
willmukepuyingtuxesluiiei,eusiei
oi mutuully beneciul will depend
ontleellectivenessoltleRevenue
Depuitmentselloitstoimpiove
tuxcollectionwitloutcieutingun
udditionulbuidentotlebusinessentity
sotlutbusinesscunlocusitsuttention
on impioving its sules undpiots.
37.6%
264
22
Thereionolonolyses
Centiul Ameiicu & tle Cuiibbeun
18
Coipoiuteincometuxis
puiticuluily signicunt loi tle
iegionintleTotulTuxRutebut
mosttimeisspentcomplying
witllubouituxesund
sociulcontiibutions.
SincePuyingTuxes2006,
tleuveiugelouistocomply
lusdeclinedby19louis,tle
smullestlullupuitliomtle
MiddleEust.
Tleuveiugenumbeiol
puymentsisligleitluntle
woilduveiugeundsecondonly
to Aliicu. A luck ol e-ling
coupledwitlnumeioustuxes
uiekeyieusons.
Tlenumbeiolpuymentslus
dioppedby7.6intleeiglt
yeuipeiiod.Tlisissligltly
luigeitluntlelullintle
woilduveiuge,butstillleuves
tleiegionwitlunuveiuge
signicuntly ubove tle
woilduveiuge.
TlelullintleuveiugeTotul
TuxRuteistlesmullestloiuny
olouiiegions.
18
The following economies are included in our analysis of Central America & the Caribbean: Antigua and
Barbuda; Bahamas, The; Barbados; Belize; Costa Rica; Dominica; Dominican Republic; El Salvador;
Grenada; Guatemala; Haiti; Honduras; Jamaica; Nicaragua; Panama; Puerto Rico; St. Kitts and Nevis;
St. Lucia; St. Vincent and the Grenadines; Trinidad and Tobago
Ponomo
Countiyuiticle,
puge83
Borbodos
Countiyuiticle,
puge79
1omoico
Countiyuiticle,
puge81
74 7KHUHJLRQDODQDO\VHV&HQWUDO$PHULFD&DULEEHDQ
The 2013 tox prole
Coipoiuteincometuxuccountsloi
oveilulloltleTotulTuxRutein
tlis iegion, u signicuntly liglei
piopoition tlun tle globul piole.
Howevei tlis is not ieected in eitlei
tlenumbeiolpuymentsoitletimeto
comply indicutois (see Figuie 2.26).
Foi tle numbei ol puyments tle piole
issimiluitotleglobulpositionwitl
otleituxesuccountingloitleluigest
puitlollowedbylubouituxesund
sociulcontiibutions.Tlepictuieloi
timetocomplyistleieveise,witl
lubouituxesluvingtleluigestpuitol
tle piole (just undei lull) wlicl is u
signicuntly liglei piopoition tlun is
seenglobully.
TotolToxRote
TleuveiugeTotulTuxRuteloitle
iegionis43.1%.Tlisisjustsligltly
belowtlewoilduveiugeol44.7%.
Tleliglcoipoiuteincometuxelement
oltleTotulTuxRuteisuveiycommon
leutuieuciosstleiegion
(see Figuie 2.27). It is tle luigest tux
inullbutlouieconomies,Punumu,
ElSulvudoi,PueitoRicoundCostu
Ricu.TleBulumusisexceptionulin
notluvingunycoipoiuteincometux
utull.Intliseconomy,otleituxeslike
tlebusinesslicenceleeundstump
duties,uietlemostimpoitunttuxes
unduccountloimostoltleTotul
TuxRute.
Figure 2.26: The tax prole for Central America & Caribbean
Prot taxes
Labour taxes
Other taxes
46%
39%
35%
19%
20%
46%
52%
28%
15%
Figure 2.27: The Total Tax Rates in Central America & Caribbean
Trinidad and Tobago
Belize
St. Lucia
El Salvador
Dominica
St. Vincent & the Grenadines
Honduras
Haiti
Guatemala
Antigua and Barbuda
Panama
Dominican Republic
Grenada
Barbados
Jamaica
Bahamas, The
Puerto Rico
St. Kitts and Nevis
Costa Rica
Nicaragua
CentrolAmerico
&Coribbeon
overoe(43.1%)
Prot taxes
Labour taxes
Other taxes
21.6 5.8 1.7 29.1
24.7 7.0 1.5 33.2
25.8 5.6 3.2 34.6
17.0 17.2 0.8 35.0
25.9 7.9 3.7 37.5
30.2 5.1 3.4 38.7
26.6 5.1 8.6 40.3
24.1 12.4 4.3 40.8
25.9 14.3 0.7 40.9
26.0 9.5 6.0 41.5
12.5 19.8 9.7 42.0
22.1 18.6 1.8 42.5
27.6 5.6 12.1 45.3
24.1 12.7 8.6 45.4
25.7 12.9 7.0 45.6
6.1 41.7 47.8
15.8 14.4 20.5 50.7
32.1 11.3 8.7 52.1
18.9 29.5 6.6 55.0
22.9 20.3 21.8 65.0
Timetocomply
Tleuveiugetimetocomplyuciosstle
iegionis218louiswlicliswellbelow
tle globul uveiuge (see Figuie 2.28).
Tlis guie lus iemuined ielutively
stubleintlemostiecentstudy.On
uveiugemosttimeisspentindeuling
witltlelubouituxesundsociul
contiibutionstlisbeingtlecuseinull
butsixoltleeconomiesintleiegion.
TlisispuiticuluilysoinJumuicuwleie
meusuiesluvebeentukeniecently
toieducetlecompliuncetimeon
tlesetuxes.
Numberofpoyments
Tleuveiugenumbeiolpuymentsis
34.9,wliclisligleitluntlewoild
uveiuge und second only to Aliicu
umongst tle iegions (see Figuie 2.29).
Tleseuieconcentiutedintleluboui
tuxesundsociulcontiibutionswleie
tleieisugeneiulluckolelectionic
ling und puyment (16 ol tle 20
economiesintlisiegiondonotuse
e-ling to uny uppieciuble degiee). Tle
montllypuymentsiequiiedloisome
oltlemujoituxessucluscoipoiute
income tux, und VAT ulso incieuses
tlenumbeiolpuyments,exumplesol
wliclcunbeloundinPunumu,und
Antiguu undBuibudu.
Figure 2.28: Time to comply in Central America & Caribbean
Figure 2.29: Number of payments in Central America & Caribbean
Bahamas, The
St. Lucia
Dominica
Grenada
Belize
Haiti
St. Kitts and Nevis
Antigua and Barbuda
Nicaragua
Trinidad and Tobago
Puerto Rico
Honduras
Costa Rica
Barbados
El Salvador
Dominican Republic
Guatemala
Jamaica
Panama
CentrolAmerico&Coribbeon
overoe(218)
Labour taxes
Consumption taxes
10 48 58
11 51 30 92
14 52 45 111
15 48 57 120
32 72 36 140
27 60 60 147
40 72 72 184
27 128 48 203
23 136 48 207
67 76 64 207
45 75 90 210
80 60 78 218
35 93 96 224
18 100 108 226
27 162 48 237
128 96 96 320
82 80 162 324
44 132 156 332
30 290 48 368
85 156 190 431
Dominican Republic
Puerto Rico
Bahamas, The
Costa Rica
Guatemala
Barbados
Belize
Grenada
St. Lucia
Jamaica
St. Kitts and Nevis
Dominica
Trinidad and Tobago
Nicaragua
Haiti
Honduras
El Salvador
Antigua and Barbuda
Panama
CentrolAmerico&
Coribbeonoveroe(34.9)
Prot taxes
Labour taxes
Other taxes
1 4 4 9
5 6 5 16
12 6 18
5 1 17 23
1 12 11 24
4 12 12 28
12 1 16 29
1 12 17 30
1 12 19 32
4 12 20 36
4 12 20 36
4 12 20 36
5 12 20 37
4 24 11 39
1 24 17 42
6 25 15 46
5 13 29 47
13 24 16 53
13 24 20 57
13 16 31 60
Thetrends
In Figuie 2.30 tle tiend dutu slows
smullieductionsloieucloltle
indicutoisoveitleeigltyeuis.Tle
uveiugepuymentsluveieducedby7.6,
tletimetocomplyby19.1louisund
tleTotulTuxRuteby2.3%.
TotolToxRote
TleTotulTuxRuteloitleiegionlus
declinedbyumodest2.3%oveitle
eigltyeuipeiiodliomuliglol4S.1%
inPuyingTuxes2006compuiing
tloseeconomiestlutluvebeeninull
yeuiscoveiedbytlestudy.Wliletle
uveiugeiemuinsjustbelowtleglobul
uveiuge,tlisistlesmullestlullin
uveiugeTotulTuxRuteloiunyoloui
iegions. Only Antiguu und Buibudu
undPueitoRicoluveexpeiienced
consideiubleieductionsintleTotul
Tux Rute. In Antiguu und Buibudu, tle
coipoiuteincometuxiutewusieduced
twice.In200Sitwusieducedliom
3S%to30%undin2008itwusieduced
to2S%.IntlemostiecentyeuiPueito
RicosuwudecieuseinitsTotulTux
Ruteliom63.1%toS0.7%.Tlisistle
luigestmovementloiunyeconomy
intlepeiiodundismuinlydueto
tleieductioninsuituxiutesliom
Junuuiy2011.
Otleieconomiesintleiegionluve
ludTotulTuxRutestlutluveiemuined
luigelystublewlilesomeluveeven
incieusedtlemoveitleeigltyeui
peiiod,loiexumpleintleDominicun
Republictleieluvebeenincieusesin
tlecoipoiuteincometuxundexcise
tuxiutescuusingtleTotulTuxRuteto
iiseliom36.2%to42.S%.
Timetocomply
SincePuyingTuxes2004,tleuveiuge
louistocomplyluvedeclinedby19
louis,tlesmullestlullupuitliomtle
Middle Eust. Tlis ieects tle geneiul
stubilityoltletimetocomplyloitle
economiesintlisiegion.
OveitleeigltyeuipeiiodHonduius,
CostuRicuundPunumuluveseentle
luigestimpiovements(ieductionsol
200,176und129louisiespectively)
tlisluigelyiesultingliomincieused
electionic ling und puyment. In
tlemostiecentyeuiPunumulus
continuedtoieduceitslouis(byS1)
witltleimplementutionolonline
ling und compunies being obliged to
le tleii VAT online, wlile in Jumuicu
tlelouisluvelullenby46louis
usuctionlusbeentukentomeige
tle ling und puyment ol ve mujoi
puyiollcontiibutions.
Numberofpoyments
Tlenumbeiolpuymentslusdiopped
by7.6intleeigltyeuipeiiod.Tlisis
sligltlyluigeitluntlelullintlewoild
uveiuge,butstillleuvestleiegion
witl un uveiuge signicuntly ubove
tlewoilduveiuge.Tleintioduction
ol online ling lus luigely diiven
tlisieduction,unditisnowuvuiluble
loilubouituxesinCostuRicuund
Belizeundloicoipoiuteincometux
inNicuiuguu.Tleieluvebeensome
exceptions,loiexumpleinSt.Kittsund
Nevis wleie VAT wus intioduced in
Novembei2010wliclincieusedtle
numbeiolpuymentsby12inlustyeuis
study (Puying Tuxes 2012). Also ol note
istlutintlemostiecentstudyJumuicu
lusieduceditsnumbeiolpuyments
byS0%byullowingemployeistopuy
seveiulpuyiollcontiibutionsjointly.
Tlislusludtleellectolieducing
puymentsliom72to36,undlusulso
impiovedtlenumbeiollouisto
complyusieleiiedtoubove.
250
200
150
100
50
0
Time (Hours)
2004 2005 2006 2007 2008 2009 2010 2011
50
40
30
20
10
0
Total Tax Rate
Payments
Time
Percentage/Payments
Figure 2.30: The trends in Central America & Caribbean
Buibudoscontinuestoleeltleimpuct
oltleglobuliecession,wlicllus
iesultedinloweconomicgiowtlloi
tle pust ve yeuis. As u consequence
no signicunt udjustments luve been
mudetotlecoipoiutetuxiutesduiing
tlistime.Meclunismsluve,lowevei,
been put in pluce to incieuse elciency
intleudministiutionoltletuxsystem
undtleseuieexpectedtoieducetux
compliuncecost,impiovetuxpuyei
sutisluctionundincieusetuxievenues.
Buibudoslusvuiyingcoipoiutetux
iutes.Reguluicompuniesuietuxedutu
iuteol2S%wlilstcompuniesuppioved
ussmullbusinesses,munuluctuiing
compuniesoiuppioveddevelopeisin
speciuldevelopmentuieus,uietuxed
utuiuteol1S%.Inteinutionulbusiness
compunies,inteinutionulbunksund
inteinutionulsocietieswitliestiicted
liubilityuietuxedonudecliningsliding
sculeutiutesiungingliom2.S%-1%.
Tleminimumiuteloitleseentities
willbeieducedto0.0S%loiincome
yeui2012und0.02S%liomincome
yeui2013.
Toieducetletimespentundcostoltux
compliunce,unelectionictuxsystem
wusintioducedin2009loiincome
yeui2008bytleDepuitmentolInlund
Revenue.Tlisenublescoipoiuteund
individuul tuxpuyeis to le tleii tux
ietuins online. Tlis electionic ling
system,ultlouglstillwitlsome
clullenges, lus impioved signicuntly
oveitleyeuisundullowstuxpuyeis
to le tleii ietuins unywleie ut
unytime.Initiullytleiewussome
lesitutionumongsttuxpuyeisundtux
piuctitioneis to le ietuins online,
lowevei, us condence in tle system
lusgiownsinceitwusintioduced
louiyeuisugo,sotoolustlelevelol
usuge. At piesent, individuul tuxpuyeis
cunelecttoluvetleiiincometux
ielundspuiddiiectlyintotleiibunk
uccounts und tlis lus simplied
tleielundpiocessloitleievenue
uutloiities.Unloitunutely,itisnotyet
ulullyelectionicsystem,ustuxpuyeis
cunnotpuytleiituxeselectionicully.
Tlesystemlus,lowevei,ullowedtle
DepuitmentolInlundRevenuetolocus
moieoltleiiiesouicesonenloicement
und investigutions, us olceis uie now
uvuilubletobedeployedintleseuieus.
Gloria Eduardo
PwC Barbados
Borbodos
Stiengtleningtletuxcollectionpiocesstoincieusetuxievenues
und ieduce tle scul decit
Vulue Added Tux (VAT) is u mujoi
componentolgoveinmentievenues,
nowgeneiutingmoieievenuetlun
diiecttuxespuidbycoipoiutions
und individuuls combined. Tle VAT
iegistiutiontliesloldwusincieused
liomBdsS60,000toBdsS80,000in
Decembei 2010 und tle VAT stunduid
iutewusincieusedon1Decembei2010
liom1S%to17.S%.Tliswusinitiully
intioducedusutempoiuiymeusuieto
beieviewedin18montlsbutlusnow
beenextendeduntilluitleinotice.
Tle VAT depuitment lus ulso iecently
uutomuted tle system loi ling ol its
VAT ietuins und iegistiunts cun now
le tleii VAT ietuins online. Tle VAT
iuteupplicubletoloteluccommodution
wusulsoincieusedon1Muy2011liom
7.S%to8.7S%(ellectivelyS0%oltle
stunduidiute).
Despitetlepievuilingdiiectund
indiiecttuxiutes,ievenuecollected
liomtuxesiniecentyeuislusbeen
insulcient to covei tle expendituie ol
tlegoveinment.Tlisismuinlydueto
tlecountiyluvinguligldebtbuiden
witltlenutionuldebtusstutedbytle
Ministei ol Finunce in lis July 2012
budgetuiypioposuls,being113.S%ol
GDP loi scul yeui 2010-2011.
InitsNutionulStiutegicPlun,tle
Buibudosgoveinmentlusestublisled
tle scul objective ol developing u
tiunspuientundsustuinublepublic
munugementsystemtopiomote
elciency und ellectiveness in tle
cuiienttuxcollectionsystems,us
wellustlesystemolexpendituie
munugement.Tlisisexpectedto
enlunce nunciul stubility und
sustuinubility,impiovecompliunce,
ieducetuxleukugesundincieusetle
leveloltuxievenuecollected.Witltlis
objectiveinmind,tlegoveinmentlus
decidedtoestublisluCentiulRevenue
Autloiity (CRA) tlut is unticiputed
tocommenceopeiutionsin2013und
becomelullyopeiutionulin2014.Tle
mujoiievenuecollectingugenciestlut
uie expected to be puit ol tle CRA
uie:DepuitmentolInlundRevenue,
CustomsundExciseDepuitment,
Licensing Autloiity und Lund
TuxDepuitment.
45.4%
237 28
1omoico
Advuncing tux ieloim tle Jumuicun jouiney
Eric Crawford
PwC Jamaica
TleJumuicuiesultsintle2012Puying
Tuxesiepoitweiedisuppointing.Tle
countiyslowoveiulliunkingcuused
muclconsteinutionuttleluunclol
tleRepoitinKingstonon16Novembei
2011.TleciedibilityoltlePuying
Tuxes iepoit is exemplied by tle
extenttowliclitisquotedinullloiu
(includingtlePuiliument)wleie
Jumuicustuxsystemisdiscussed,us
wellustlelostingolseveiulvisits
liommembeisoltleteumbysenioi
policymukeis,udministiutoisundtle
piivutesectoiwloweieinteiested
inleuiningmoieoltlemetlodology
und signicunce ol tle study. Hence,
tleimpiovementsiepoitedtlis
yeui,wliclincludeieductionsin
puyiolltuxpuymentsliom48to
12unnuullyundtimetocomplyby
11%willbenotedkeenlybytletux
udministiutois,puiliumentuiiunsund
tle business community. Fuitleimoie,
electionic ling und iemittunce ol tux
uswellusdiiectbunkingoptionsuie
nowwellestublisledundtleieuie
initiutivestoexpundtleselucilities
evenluitlei.Tlesemeusuiesuppeui
tobebeuiingliuit,usutypicully,tux
ievenuesexceededtletuigetedlevels
muiginully loi tle ist loui montls ol
tlis scul yeui, despite u 10% incieuse
in budgeted ievenues ovei scul yeui
2012outtuin.
Tleloiegoinginitiutivesloimpuitol
ongoingtuxieloimpiogiummesin
Jumuicu,wlicllusundeitukentliee
mujoiioundssincetle1980s.Yettleie
stillisbioudconsensustlutciiticul
elementsoltletuxsystemuieinneed
olluitleiieloim,botluttlepolicy
undtleudministiutionlevels.Inluct,
tlisisoneoltletlieenon-negotiuble
demundsoltleInteinutionulMonetuiy
Fund (IMF) in its ongoing negotiutions
witltleJumuicungoveinmentto
concludeunewuiiungementtoiepluce
unextendedlundlucilitytlutwus
teiminutedpiemutuielyin2011.
In1986und1987iespectively,
tleindividuulundcoipoiutetux
systems weie simplied consideiubly.
A piogiessive iute stiuctuie loi
individuuls(witlS7.S%uttlemuigin)
wusieplucedbyusingleiuteol33
1
/3%
(luteiieducedto2S%)onincomes
ovei u xed tlieslold. Simultuneously,
uiungeoluntuxedullowunces
weieeliminuted.
A two tieied coipoiute tux iute (ol

4S%),wuseliminutedundiepluced
witlusingleiuteol33
1
/3%.In1991,
geneiul consumption tux (u VAT)
wusintioducedusuieplucementloi
unumbeiolotleituxesundlevies,
including sules & consumption tuxes,
excise/consumptiondutiesundmost
udditionulstumpduties.
In2004,ugoveinmentuppointed
committeeiecommendeduwideiunge
olieloimsdesignedtobioudentle
tuxbuse,wlilstsliltingtlebuiden
liomdiiecttoindiiecttuxes.Onekey
iecommendutionwustleeliminution
olzeioiutingolsuppliesotleitlun
expoitsunddiplomuticpuiclusesus
wellusuieductionintlenumbeiol
exemptitems.Since200S,successive
goveinmentsluvecommitted
tlemselvestoimplementingseveiul
oltleiecommendutionsmentioned
ubove, but despite u signicunt
ieductionintlenumbeiolzeio-iuted
und exempt items undei tle VAT
system,tleyluveliequentlyielented.
Foi exumple, 2012 wus unotlei yeui
ol expected signicunt ieloim bused
ontleguiduncepublisledinugieen
pupeipiesentedtopuiliumentin2011
(wliclexpiesseddisuppointment
intleuclievementsoveitleyeuis).
Goveinmentunnouncedtleimposition
ol tle VAT on 13 mujoi cutegoiies ol
goods,muinlybusicloods,unimul
leeds,ugiicultuiulinputs,ceituin
mediculsuppliesundpiintedmuteiiuls;
uswellusunincieuseintleiuteol
tuxonlouseloldelectiicitybills
(ubove300kwlolconsumptionpei
montls).Witlintwoweeksoltle
unnouncementlowevei,unumbeiol
tlesedecisionsweieieveised.Inluct,
not only wus un incieused VAT iute loi
louseloldelectiicitybillsieveised,but
uloweiiuteoltuxtlutwusimposedon
tlisseivicein2010wusulsoiemoved.
Despite tle disuppointment ieected
intleGieenPupeiinudditiontotle
udministiutiveieloimsdiscussed
ubove,tleielusbeenpiogiessin
otleiimpoituntuieus,ulbeitoveiu
piotiucted peiiod. Foi exumple, tle
coipoiutetuxiutewillbeieducedliom
33
1
/3%to2S%nextyeui.Tiunsleituxes
undstumpdutiesontlesuleollund
lusbeenieducedliomuppioximutely
13%to7%undtleieisnolongeitux
ontletiunsleioldebtsecuiities.Tux
ondividendsisnowmodeiuteutS%loi
iesidentsluieloldeis.
Sowlutuietlemujoiuieusolieloim
tlutuieyettobeimplemented?
Tlebigissuediivingtledemund
loi luitlei ieloim by tle IMF in tle
negotiutionswitltlegoveinmentloi
mucloltlisyeuiuppeuistobetle
need loi it to ieduce signicuntly, tle
giuntolwuiveisundincentives(some
olwlicluieucknowledgedtobeol
developmentul vulue). Tle IMF is ulso
insistingonluitleiudministiutive
ieloimstoieducetleextentoltle
tux leukuge iesulting liom signicunt
numbeisolpeisonsevudingtuxes.
Tlese nul yuids in wlut lus tuined
outtobeugiuellingmuiutlonuie
ciiticul.Jumuicuseconomicsuivivul
dependsonuccomplislingtlem.
An uwesome iesponsibility lies witl
tleudministiution.
45.6%
368
36
Punumuiscuiientlyutunextiemely
inteiestingmomentinitseconomic
giowtlcycle.Tleieiscuiientlymucl
impiovementintleinliustiuctuie
oltlecountiytukingpluceincluding
teclnology,communicutions,und
iegionulconnections.Tleeconomic
giowtl is tle iesult ol signicunt
elloitsmudebygoveinmentto
positiontlecountiycompetitivelyin
uglobulcontextundtleieisudiive
loitleseimpiovementstocontinueto
ensuiePunumukeepspucewitltle
inteinutionulcommunity.
Toluveuneconomywlicllus
sustuinublegiowtl,wliclcunlelp
goveinmentmeetitsobjectives
iequiies signicunt iesouices.
Tleieloieluvingutuxsystemwlicl
cundeliveitleseiesouicesiskeyloi
development.Evolvingtuxsystems
oltengeneiuteincieusedcomplexity
und Punumu is no exception. Foi tlis
ieuson,itisolgieutimpoitunceloi
timeundelloittobededicutedto
ieviewtletuxsysteminPunumuund
tocompuietlecountiyssystemswitl
otleisuioundtlewoildwitluviewto
identilyingsloitcomings,undpossible
ieloimmeusuiestlutmuybeiequiied.
TlePuyingTuxesindicutoisuieu
uselulindexintliscontexttolelp
ussesstlestundingolPunumuliom
tlepeispectiveoltletuxobligutions
wlicluieplucedonbusinessund
wliclluvetobecompliedwitlwlen
doingbusiness.
Ponomo
Developingutuxsystemtokeeppucewitltle
inteinutionulcommunity
Francisco Barrios
PwC Panama
OveitleeigltyeuisoltlePuying
Tuxesstudyieloimstotletuxsystem
luvebeenimplementedwliclluve
ieducedtlePuyingTuxesindicutois
inPunumu.TleTotulTuxRutelus
ieducedliom49.3%to42.0%und
keptbelowtlewoilduveiuge(44.7%),
wliletletimetocomplyluslullen
liomS60louisto431louisbuttlisis
stillwellubovetlewoilduveiuge.
A ieduction in tle coipoiute income
tuxiuteto2S%in2011luscontiibuted
to tle lull in tle Totul Tux Rute. Foi tle
timetocomplywlileiecentieloims
luve been mude to VAT wlicl enuble
compunies to le tleii VAT online, und
impiovementsluvebeenmudetotle
sociulsecuiitycontiibutionsystemsto
ieducetlenumbeiollouisiequiiedin
2011,tleintioductionolnewloimsloi
coipoiuteincometuxluveincieused
tleiequiiementsloitluttuxundulso
intioducedtleneedloiudditionul
puyments.Itisexpectedloweveitlut
tlenumbeiolpuymentswilllulluguin
innextyeuisstudyusluitleiclunges
luvenowbeenimplementedtodotlis.
TlePuyingTuxesstudyinvitesusto
ieect on tlese movements und to
encouiugeudiuloguebetweenbusiness
undgoveinment,sotluttogetlei
someconsensusontleobjectives
undlowtleycunbeieucledcunbe
uclieved.Tlelopeistlutintliswuy
unimpiovementintleiesultsoltle
PuyingTuxeswitlintleWoildBunk
und IFC Doing Businesspiojectcunbe
uclievedwitltungibleiesultsloiull
membeisoltlecommunity.
42.0%
431
60
Thereionolonolyses
Centiul Asiu & Eustein Euiope
19
TleuveiugeTotulTuxRuteloi
tleiegionis41.3%wliclisu
littlebelowtlewoilduveiuge
ol44.7%.
Tleiegionlusslowntle
biggestimpiovementoluny
iegionloieucloltleindicutois
upuitliomtleTotulTuxRute
wleietleMiddleEustslowsu
ieductionol1S.8%compuied
toulullol12.6%inCentiul
Asiu & EusteinEuiope.
Almost ull ol tle economies in
tle iegion luve u signicunt
elementoltleTotulTuxRute
uccountedloibylubouituxes
undsociulcontiibutions,but
inudditionintlieeeconomies
otleituxesuieimpoitunt.
Tleieloimsmudeluvemoved
tlisiegionclosetotleglobul
uveiuge loi euclindicutoi.
Tleintioductionolelectionic
ling, und ieducing tux iutes
luvebeenkeytotleieloim
piocessintlisiegion.
uciosstlisiegionis261louis,
onlysixlouisbelowtlewoild
uveiugeol267.Itisevenlysplit
betweentlemujoituxes.
19
The following economies are included in our analysis of Central Asia & Eastern Europe: Albania;
Armenia; Azerbaijan; Belarus; Bosnia and Herzegovina; Croatia; Georgia; Israel; Kazakhstan; Kosovo;
Kyrgyz Republic; Macedonia, FYR; Moldova; Montenegro; Russian Federation; Serbia; Tajikistan;
Turkey; Ukraine; Uzbekistan
Turkey
Countiyuiticle,
puge93
Kozokhston
Countiyuiticle,
puge91
86 7KHUHJLRQDODQDO\VHV&HQWUDO$VLD(DVWHUQ(XURSH
The 2013 tox prole
Tle globul nding tlut coipoiute
incometuxisonlypuitoltlebuiden
uppliesequullyintlisiegion.Tle
tux piole ucioss tle indicutois
issimiluitotleglobuluveiuge
positionbuttleelementoltleTotul
TuxRuteuccountedloibyluboui
tuxesundsociulcontiibutionsisu
luigeipeicentuge (see Figuie 2.31).
TotolToxRote
iegionis41.3%wliclisulittlebelow
tlewoilduveiugeol44.7%.Tleieis
uwideiungeinTotulTuxRutesucioss
tleiegionliom9.4%intleloimei
YugosluvRepublicolMucedoniuto
98.S% in Uzbekistun (see Figuie 2.32).
Almost ull ol tle economies in tle
iegion luve u signicunt element ol
tleTotulTuxRuteuccountedloiby
lubouituxesundsociulcontiibutions,
butinudditionintlieeeconomies
tleKyigyzRepublic,Tujikistunund
Uzbekistunotleituxesuieimpoitunt.
Exumplesoltleseotleituxesuietle
tuinoveituxinKyigyzRepublicwlicl
uccountsloioveilulloltleTotulTux
Ruteintluteconomy,uioudtuxlevied
ontuinoveiinTujikistunuccounting
loioveiutliidoltleiute,und
contiibutionstopensionlundsundto
ioudlunds(busedontuinovei)wlicl
uguinuccountloimoietlunlulloltle
iute levied inUzbekistun.
Figure 2.31: The prole of taxes borne in Central Asia & Eastern Europe
Prot taxes
Labour taxes
Other taxes
55%
30%
37%
29%
25%
34%
25%
50%
15%
Figure 2.32: The Total Tax Rates in Central Asia & Eastern Europe
Macedonia, FYR
Kosovo
Georgia
Montenegro
Bosnia and Herzegovina
Kazakhstan
Israel
Moldova
Croatia
Serbia
Albania
Armenia
Azerbaijan
Turkey
Russian Federation
Ukraine
Belarus
Kyrgyz Republic
Tajikistan
Uzbekistan
CentrolAsio&EosternEurope
overoe(41.3%)
Prot taxes
Labour taxes
Other taxes
6.2 3.2 9.4
9.1 5.6 0.7 15.4
14.3 2.2 16.5
7.1 12.8 2.4 22.3
7.2 12.6 4.3 24.1
15.9 11.2 1.5 28.6
22.1 5.3 3.1 30.5
30.6 0.6 31.2
11.3 19.4 2.1 32.8
11.6 20.2 2.2 34.0
8.6 25.3 4.8 38.7
15.0 23.0 0.8 38.8
12.9 24.8 2.3 40.0
17.9 18.8 4.5 41.2
7.1 41.2 5.8 54.1
11.6 43.1 0.7 55.4
20.3 39.0 1.4 60.7
6.2 19.5 43.2 68.9
28.5 56.0 84.5
0.9 28.2 69.4 98.5
Timetocomply
Tleuveiugetimetocomplyucioss
tlisiegionis261louis,only6louis
belowtlewoilduveiugeol267louis.
Figuie 2.33 slows tlut ucioss tle
iegiontletimetocomplyisluiily
evenlysplitbetweentletlieemujoi
tuxes.Onuveiugeittukes97louis
tocomplywitlotleituxes,76louis
to comply witl piot tuxes, und 88
louistocomplywitllubouituxesund
Numberofpoyments
Tleuveiugenumbeiolpuymentsut
30.4loitlisiegionisjustubovetle
woilduveiugeol27.2.Tleieisuwide
iunge liom ve in Geoigiu to 69 in
Tujikistun.Tlisdemonstiutestlut
tleieuieunumbeioleconomieswlicl
luveyettoimplementcompielensive
online ling und puyment systems.
Figuie 2.34 slows tlut electionic
ling is uvuiluble loi coipoiute income
tuxundlubouituxesundsociul
contiibutionsinGeoigiu,Russiu,
Kuzuklstun, Aimeniu und Tuikey,
wliclluslelpedtokeeptlenumbei
olpuymentsbelow20;loiRussiuund
Tuikeytlisisdespitetlecusestudy
compunybeingsubjecttotleliglest
numbeioltuxesintleiegion(13und
14 iespectively). Tle luck ol e-ling
loiulltuxesinSeibiu,Tujikistunund
KyigyzRepublicgivesiisetotleligl
numbeisolpuyments,(66,69undS1
puymentsiespectively)uspuyments
uie mude munuully loi eucltux.
Figure 2.33: The time to comply in Central Asia & Eastern Europe
Figure 2.34: Number of payments in Central Asia & Eastern Europe
Macedonia, FYR
Kosovo
Russian Federation
Kazakhstan
Croatia
Uzbekistan
Kyrgyz Republic
Azerbaijan
Moldova
Turkey
Tajikistan
Israel
Serbia
Georgia
Montenegro
Belarus
Albania
Armenia
Ukraine
CentrolAsio&Eostern
Europeoveroe(261)
Labour taxes
Consumption taxes
19 56 44 119
32 42 90 164
60 76 41 177
75 70 43 188
60 96 40 196
66 69 70 205
60 71 79 210
60 97 57 214
72 94 54 220
46 80 97 223
80 48 96 224
110 60 65 235
48 126 105 279
109 56 115 280
43 98 179 320
166 93 79 338
119 94 144 357
121 162 97 380
68 81 258 407
109 192 190 491
Georgia
Kazakhstan
Russian Federation
Belarus
Armenia
Turkey
Azerbaijan
Croatia
Ukraine
Macedonia, FYR
Montenegro
Israel
Kosovo
Uzbekistan
Albania
Moldova
Kyrgyz Republic
Serbia
Tajikistan
CentrolAsio&EosternEurope
overoe(30.4)
Prot taxes
Labour taxes
Other taxes
1 1 3 5
1 1 5 7
1 2 4 7
1 5 4 10
1 1 11 13
1 1 13 15
1 12 5 18
1 12 5 18
1 24 3 28
12 1 16 29
1 12 16 29
2 12 19 33
5 12 16 33
8 12 21 41
13 12 19 44
12 1 31 44
1 28 19 48
5 12 34 51
12 12 42 66
11 12 46 69
Thetrends
Figuie 2.3S slows low tle tliee
indicutoisluveclungedloitlisiegion
oveitleeigltyeuisoltlestudy.
Tleiegionlusslowntlebiggest
impiovementolunyiegionloieucl
oltleindicutoisupuitliomtleTotul
TuxRute.
TotolToxRote
iegionluslullenby12.6%liomPuying
Tuxes2004totlemostiecentstudy.
Itisnowsligltlybelowtlewoild
uveiuge.Tlebieudtlundpuceoltux
ieloimlusvuiieduciosstleiegionbut
itlusgiuduullyucceleiuted,undtle
lullintleTotulTuxRuteoveitleeiglt
yeuisoltlestudyisonlysecondtotlut
iecoidedloitleMiddleEust.
A numbei ol economies luve
contiibutedtotlisdeclinewitltle
luigestlullbeingiegisteiedinBeluius
wleietleiutelellliom137.S%to
60.7%demonstiutingucommitment
tocieutingunenviionmentwliclis
moielikelytoencouiugegiowtlund
economicuctivity.Tleieloimsluve
includedtleubolitionoltletuinovei
tuxundieductionsinvuiioussociul
secuiitycontiibutions.
2004 2005 2006 2007 2008 2009 2010 2011
60
50
40
30
20
10
0
600
500
400
300
200
100
0
Time (Hours)
Total Tax Rate
Payments
Time
Percentage/Payments
Figure 2.35: The indicator trends for Central Asia & Eastern Europe
Timetocomply
Tlisiegionlusiecoidedtleluigest
lullintleuveiugetimetocomply
loiunyolouiiegions.Tlelouisto
complystuitedtolullinPuyingTuxes
2008undtleieductionucceleiuted
tleieultei.Tleuveiugetimetocomply
luslullenby200louis.Tleeconomies
slowingtleluigestlulloveitleeiglt
yeuisluvebeentleUkiuine,Beluius,
undAzeibuijun.
IntleUkiuinetlelouistocomply
lellto491inPuyingTuxes2011liom
2,08SinPuyingTuxes2004.Tlemuin
diiveisloitlislullweietleincieused
use ol electionic ling und muintuining
electioniciegisteisloicoipoiute
piots tuxes, VAT, peisonul income
tuxundloiullsociulcontiibutions
includingpensionlundcontiibutions,
ulong witl tle unicution ol sociul
secuiitytuxesin2011.Tlecompliunce
timeisexpectedtoieduceluitleiin
tlelutuieuscompuniesbecomemoie
comloitubleundlumiliuiwitlusing
tle onlinesystems.
Beluiuslusbeenukeydiiveiolieloim
lookingtomukeiteusieiloituxpuyeis
tocomplywitltuxobligutionsieducing
itstimetocomplyby649louisovei
tleeigltyeuisoltlestudy.In2008
electionicsystemsweieimplemented,
wlileunonlinetuxpoitulbecumelully
opeiutionulin2009,undby2011,tle
mujoiityolcompuniesinBeluiusweie
seentobetukingudvuntugeoltle
vuiiouselectioniclucilitiesuvuiluble
loituxcompliunce.
In Azeibuijun tle totul numbei ol louis
luslullenliom7S6inPuyingTuxes
2004to214in2011,tlekeydiiveisloi
tlisbeingintleintioductionunduse
ol online ling und puyment, und tle
intioductionoluccountingsoltwuieto
ussistwitltleculculutionolpuyments.
Numberofpoyments
Tlenumbeiolpuymentslusulso
lullenconsistentlyoveitleeigltyeui
peiiodby22.2liomS3.1to30.9.Tlis
lullistwiceusluigeusiecoidedbyuny
otleiiegion.Tlisnumbeiloweveistill
putstleuveiugeiesultloitlisiegion
justulittleligleitluntlewoild
uveiugeol27.S.
UkiuineundBeluiusuietleeconomies
wlicluguinluvebeentlediiving
loicebelindtleieductionintlis
indicutoiundloitleUkiuinetle
ieloimsgivingiisetotlisieduction
luveluigelytukenpluceintlemost
iecentpeiiod.Tlemuinieloimdiiving
tleieductionlusbeentleintioduction
ol online ling und u subsequent
incieuseintleuseolonlinelucilities
bybusinesses.
7KHUHJLRQKDVVKRZQWKHELJJHVW
improvement of any region for
each of the indicators apart from
WKH7RWDO7D[b5DWH
Globully,tlepustyeuilusbeenutime
duiingwliclquestionsuioundtux
policyundtuxudministiutionluve
continuedtomuketleleudlines.
Witltlegeneiulincieuseinpublic
debtbuidensuciosstleglobeundu
ieducedoutlookloiglobuleconomic
giowtltleclullengeolluiinessliom
utuxsystemiemuinsonetlutluces
muny economies. Foi Kuzuklstun,
tlemucioeconomicpictuieispeilups
moiepositivetlunloimunyotlei
countiies;buttleecloesoltleglobul
tiendsuiepiesentleieuswell.
Beyondtleglobulpiessuies,
Kuzuklstunisulsouduptingund
ieuctingtosomemoieiegionul
ieulities.Tleimplicutionsoltle
CustomsUnionwitlRussiuund
Beluiusundtleintioductionolu
singleeconomicspuceuiebeingbettei
undeistoodbytlepluyeisintle
muiket.Witlintlisliumewoik,tleie
is u iole loi tle scul enviionment
indeteiminingtleielutive
competitivenessoluneconomy.Puit
oltleclullengeloiKuzuklstunisin
continuingtoulignudministiutive
piocessestoeusetleopeiutionoltle
CustomsUnion,butensuiingtlut
bestpiucticeistukenustlecommon
denominutoi,iutleitlunudoptingoi
selectingbydeluulttlepiucticewlicl
cunbeexpedientlyimplementedbut
wliclmuynotbiingtlesumelevelol
elciency. In uddition to tle ongoing
implementutionoltleCustoms
Union,tlegouloltlegoveinment
ol Kuzuklstun loi diveisicution
oltleeconomypusttleextiuctive
industiiesundtleoveiuiclinggoul
olbeingucompetitiveeconomyulso
continuestouddtotledebuteubout
tle sculsystem.
Kozokhston
Puisuingucultuieoltuxieloim
Peter Burnie
PwC Kazakhstan
SowleiedoestlisleuvePuyingTuxes
us u diivei ol clunge? Tle signicunt
elloitsutieloimtlutluvebeenmude
bytleuutloiitiesintlepustyeuis
uie ulieudy ieected in tle ielutively
stiongimpiovementiniunkingtlut
Kuzuklstun lus uclieved. As tle
competitionuttletopoltletuble
is eice, tleie will be lewei ieloim
initiutives tlut cun muke u signicuntly
meusuiubledilleience.Muintuining
tleligliunkingleveltlutKuzuklstun
cuiientlyenjoysmeunstlutuioutine
olcontinuousimpiovementisulieudy
beingudopted:tledebuteubout
udministiutionieloimcontinuesund
tletuxpuyeiexpeiienceisexumined
undieviewedliommultipleungles.
PuiticiputioninPuyingTuxestleieloie
continues to pluy its iole in tle scul
debuteintlecountiy.
Tle Kuzukl scul uutloiities ulso
incieusinglyengugewitltleiiiegionul
undglobulcounteipuitstoseekout
initiutivesoisluieinsigltsliomtleii
expeiience.Discussionsubouttopics
sucl us tuckling VAT non-compliunce
uie ongoing. Anotlei initiutive tlut
isinpiocessistleioleolelectionic
invoicingundlowtliswillintegiute
witltletuxudministiutionsystem.
Foi tle lutuie, tleie is notling to
indicutetlutwewillnotbecontinuing
downtlesumeputlolidentilying
undpuisuingieloiminitiutives.
Kuzuklstunisiunkedligleiin
tlePuyingTuxessuiveytlunits
neiglbouis,meuningtlutitmuybeu
pluceloiotleistodiuwinspiiution.
Howevei, tle tiulc will not be ull one
wuy.Regionulieloimugenduswill
cieutetleneedloiKuzuklstuntoulso
ielieslitsuppioucl.
ClungeinKuzuklstunisconstunt
und geneiully iupid. A cultuie ol
clungelusulsobeenudoptedloi
tuxudministiutionintlepustyeuis,
witlvisiblemeusuiubleiesultsintle
PuyingTuxessuiveyiunking.Tle
nextpuitoltleclullengeistoullow
tliscultuieolieloimtocontinueto
uddiess otlei uspects ol tle scul
enviionmentsuclusuuditunddiive
positiveiesultsnotonlyinteimsoltle
tlieeuspectsmeusuiedbytlesuivey,
butulsoinudditionulelementsoltle
tuxpuyeiexpeiience.
28.6%
188 7
Zeki Gunduz
PwC Turkey
Tuxesstudyieloimstotletuxsystem
luvebeenimplementedwliclluve
ludupositiveellectontleindicutois,
biingingtleTotulTuxRuteloiTuikey
belowtlewoildundEuiopeun
uveiugesundkeepingtlecompliunce
indicutoissimiluilybelowtlese
uveiuges.Sincetle2004studytle
TotulTuxRuteluslullenliomS3%
to41.2%.Tlemuincontiibutoisto
tlislullluvebeenuieductionintle
coipoiuteincometuxiuteliom30%
to20%in2006,undulullintlesociul
secuiitycontiibutionliom19.S%to
14.S%usuS%iebutebecumeuvuiluble
loi tle elcient ling ol ietuins in
2009.Tletimetocomplylusulso
lullen(liom2S4louisto223louis)
ieecting tle tiunsition to electionic
invoiceinliustiuctuieundtle
uvuilubilityolune-invoicepoitul.
As is olten tle cuse in muny
juiisdictions,economicindicutois
pluyunimpoituntioleinsluping
tuxpolicy.Tlislusbeenunissuein
Tuikeyiecentlybecuusetlecountiys
cuiient uccount decit is ligl,
ieuclingUSS77.1billion(10%olGDP)
in 2011. Tle giowtl ol tle decit is
duetoTuikeysleuvydependenceon
impoitingvulue-uddedpioductsund
eneigytoiunitseconomywlicllus
iuisedmunyconceinsintlelustlew
yeuis.Tlegoveinmentlusembuiked
onunumbitiouspiogiummetotuckle
tle cuiient uccount decit und lus
tukenmeusuiestolelpieduceitintle
sloit-teim.Witltleiebuluncingin
tleTuikisleconomy,tiudeconditions
uiestuitingtoimpioveuttlesume
timeusconsumptionscontiibutionto
GDPisdecliningsluiply.Tleieloie,
weseeugiuduulimpiovementintle
cuiient uccount decit stuiting liom
tle beginning ol tle yeui. As ol tle end
ol tle ist lull ol 2012, tle cuiient
uccount decit lell to USD63 billion,
dioppingto8.2%olGDP.
Turkey
Tuckling tle cuiient uccount decit und impoitunt developments
intleTuikisllundscupe
And yet tleie uie still meusuies tlut
needtobetukentoensuiecontinued
impiovement in tle long iun. As puit
oltliselloit,ulugetuxincentive
puckugewusluuncledin2012.Tle
puckugecontuinsuwidevuiiety
oltuxielielundexemptionsund
leutuiesucomplexmutiixsystem
tlutdeteiminestlelevelolincentive
giunteddependingontlelocutionund
typeolinvestment.Insimpleteims,
tleincentiveslullintolouicutegoiies:
geneiul,iegionul,luige-scule
investment,undstiutegicinvestment.
Undeieuclcutegoiy,vuiiousieliel
optionsundexemptionsuiepiovided,
muinly including VAT exemptions,
ieductionsoiexemptionsonincome
tuxes,witlloldingtuxes,customsund
sociulsecuiityexemptions,ullocution
olinvestmentuieus,subsidieson
inteiest on boiiowing, und VAT
ielunds.Stiutegicinvestmentsuietle
onlyoneseligibleloiullexemptions
undincentivesbecuusetlewlole
puiposeoltlistuxincentivepuckugeis
toencouiugeentiepieneuistopioduce
keypioductstlutTuikeyisleuvily
dependentonundtoincentivise
investmentsiniuiul,lessdeveloped
und,moieimpoituntly,tioubleduieus
inTuikey.Tleseinvestmentsuie
ultimutelyexpectedtolelpluitlei
ieduce tle cuiient uccount decit.
Anotlei mujoi development ussociuted
witltlispuckugeisieloimintle
piivutepensionsclemetolelpbolstei
suvingsbyincieusingtleuttiuctionol
tlescleme.Tlismoveisulsoexpected
to ieduce tle cuiient uccount decit in
tlelongiun.Oneoltlekeyclungesis
tluttlegoveinmentwillstuittoinvest
witlpensioneisuttleiuteol2S%ol
tleiicontiibutionumount.Hence,loi
eveiyTRY100upensioneiinvests,tle
goveinmentwillinvestTRY2Sontleii
belull.Pieviously,pensioneisweie
ullowedtodeducttlecontiibution
liomtleiipuyiolltuxbuse,buttleuse
oltliscieditwuslimited.Howevei,
clullengesstilllieuleudusieceipts
liomsomeoltletuxesonimpoit
tiunsuctionstlutwouldotleiwise
luvelelpedieducetlecuiient
uccount decit in tle scul budget
luvelullen.Tlesluieoltiunsuctionul
tuxievenueinoveiulltuxincomeis
uiound 70%. Tle Finunce Ministei
lusulieudysuggestedtlutnewtux
incieusesuieontlewuyinudiult
luwtlutlusbeensenttotlePiime
Ministei. Altlougl tlese pioposuls uie
notceituinuttlisstuge,tlecuiient
debuteisievolvinguioundunincieuse
intiunsuctionultuxesondisposuls
ol ieul estute, iemoving existing VAT
exemptionsloiieulestuteinvestment
tiusts,undincieusingtiunsuctions
tuxesonimpoits.Tletuxuutloiities
uielocusingontleieulestuteindustiy
ustleindustiylusbeenbooming
loitlelusttenyeuiswitltle2008
cieditciunclluvinglittleellecton
tlemuiket.
41.2%
223
15
Foi tle lutuie, we lope to see tle
Tuikisltuxsystemevolveluitleiwitl
incieused elciency, tiunspuiency und
ucompetitiveTuikisltuxsystemwlicl
willlelptoboostTuikeyseconomic
development.
Tlisyeuitleieisuiegionulluuncl
oltlePuyingTuxespublicutionin
Istunbul.Tliswillpiovideuuselul
oppoitunity to ieect on tle iesults
oltlePuyingTuxesloiTuikeytlutwe
luveseensolui,tlecuiientpioposuls
loiluitleiieloimundlowitmigltbe
expectedtlesewillluitleievolveund
impuctontleiesultsintlelutuie.
Thereionolonolyses
EU & EFTA
20
62%oltleTotulTuxRutein
tle EU & EFTA is uccounted
loibylubouituxesund
TleTotulTuxRuteluslullenin
tleiegioneuclyeuisincetle
studybegunupuitliomintle
mostiecentyeui.Tleuveiuge
iutelusincieusedby0.1%
betweenPuyingTuxes2010
und Puying Tuxes2011.
uciosstlisiegionis184louis,
83louisbelowtlewoild
uveiuge,undtlelowestol
unyiegionupuitliomtle
MiddleEust.
Tleuveiugelouistocomply
luvelullenineucloltlelust
sevenyeuisoltlestudy,lulling
by60louisoveiull.Tleiegion
lustlesecondlowesttime
tocomply.
Tleuveiugenumbeiol
puymentsut12.8loitlisiegion
istlelowestupuitliomNoitl
Ameiicu. Tlis low numbei
isluigelyulunctionoltle
commonusugeolelectionic
ling und puyment loi tle
mujoituxes.
20
European Union & European Free Trade Association (EU & EFTA). The following economies are included
in our analysis of EU & EFTA: Austria; Belgium; Bulgaria; Cyprus; Czech Republic; Denmark; Estonia;
Finland; France; Germany; Greece; Hungary; Iceland; Ireland; Italy; Latvia; Lithuania; Luxembourg;
Malta; Netherlands; Norway; Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain; Sweden;
Switzerland; United Kingdom
Portuol
Countiyuiticle,
puge10S
Germony
Countiyuiticle,
puge101
Hunory
Countiyuiticle,
puge103
Spoin
Countiyuiticle,
puge107
96 7KHUHJLRQDODQDO\VHV(8()7$
The 2013 tox prole
Lubouituxesundsociulcontiibutions
continuetouccountloitleluigestpuit
oltleTotulTuxRuteintlisiegion
undtuketleluigestumountoltimeto
comply (see Figuie 2.36). Tle piole
loitlenumbeiolpuymentsisleuvily
weigltedtowuidsotleituxeswlicl
includes VAT, enviionmentul tuxes, und
locultuxes.
TotolToxRote
iegionis42.6%wliclisjustbelowtle
woild uveiuge (see Figuie 2.37). Tle
lubouituxesundsociulcontiibutions
elementoltleTotulTuxRuteistle
luigestin23oltle30economiesin
tlisiegion.Denmuik,tleUK,Multu
(newintlestudytlisyeui),Iielund,
Icelund,TleNetleilundsundNoiwuy
uietleexceptionswleiecoipoiute
income tuxes uie tle luigestelement.
Figure 2.36: The tax prole for taxes borne in the EU & EFTA
Prot taxes
Labour taxes
Other taxes
68%
20%
32%
21%
48%
8%
62%
30%
12%
Figure 2.37: The Total Tax Rates in the EU & EFTA
Luxembourg
Cyprus
Ireland
Denmark
Bulgaria
Switzerland
Iceland
Slovenia
United Kingdom
Latvia
Spain
Netherlands
Finland
Norway
Malta
Portugal
Lithuania
Poland
Romania
Greece
Germany
Slovak Republic
Czech Republic
Hungary
Sweden
Austria
Belgium
France
Estonia
Italy
EU&EFTAoveroe(42.6%)
Prot taxes
Labour taxes
Other taxes
4.1 15.4 1.5 21.0
9.0 11.8 2.2 23.0
11.9 11.6 2.9 26.4
20.0 3.6 4.1 27.7
4.8 20.2 3.7 28.7
8.9 17.7 3.6 30.2
10.4 9.8 12.8 33.0
14.1 18.2 2.4 34.7
22.2 10.2 3.1 35.5
4.8 27.3 4.5 36.6
1.2 36.8 0.7 38.7
20.6 18.1 1.4 40.1
15.0 24.4 1.2 40.6
24.4 15.9 1.3 41.6
29.2 11.3 1.1 41.6
14.5 26.8 1.3 42.6
5.9 35.1 2.7 43.7
17.4 23.8 2.6 43.8
10.5 31.5 2.2 44.2
11.0 32.2 1.4 44.6
18.9 21.9 5.9 46.8
6.8 39.6 1.5 47.9
7.5 38.4 3.3 49.2
12.3 34.5 3.5 50.3
15.7 35.5 1.8 53.0
15.0 34.7 3.4 53.1
5.4 50.8 1.5 57.7
8.2 51.7 5.8 65.7
8.0 39.4 19.9 67.3
22.9 43.4 2.0 68.3
Timetocomply
Tleuveiugetimetocomplyuciosstlis
iegionis184louis,83louisbelow
tlewoilduveiuge,undtlelowestol
unyiegionupuitliomtleMiddleEust
(see Figuie 2.38). Two economies in
tleiegion,tleCzeclRepublicund
Bulguiiu luve u signicuntly liglei
numbeiollouiswitl413und4S4
louisiespectively.Tlemuinieusons
loitleiiligllevelsolcompliuncetime
ielutestotlelubouituxesundsociul
contiibutions, us well us VAT.
In23economiesittukestlelongest
timetodeulwitllubouituxesund
sociulcontiibutions.Eleveneconomies
intleiegionluvelouioimoieol
tlesetuxeswliclexpluinstleligl
compliuncelouis.Hunguiyund
Romuniuluvesixdilleienttypesol
tlesetuxes.Tletimetocomplyisulso
diivenbytlecomplexityoltlesetuxes
Tle VAT systems wlicl uie upplied
ineveiyeconomyintlisiegion,
uccountloi32%oltletimetocomply
onuveiuge,butusweluveiepoited
in pievious yeuis, ultlougl tle VAT
intlisiegionisluigelygoveinedby
ucommonlegulliumewoiktleieis
consideiublevuiiutionintletime
tocomplywlicliungeliomeiglt
louisinSwitzeilundto16Slouisin
Bulguiiu.Tleieusonloitlisistlut
tleudministiutivepioceduiesusedto
implementtletuxvuiyconsideiubly
including tle liequency ut wlicl VAT
ietuinsuieiequiied,tlesuppoiting
documentutionundinvoicestlutuie
iequiiedbysomecountiiesundnot
in otleis, und low extensive tle VAT
ietuinsuietlutluvetobecompleted.
Figure 2.38: The time to comply in the EU & EFTA
Luxembourg
Switzerland
Ireland
Estonia
Norway
Finland
United Kingdom
Sweden
Netherlands
Denmark
France
Malta
Iceland
Cyprus
Belgium
Spain
Austria
Lithuania
Greece
Germany
Slovak Republic
Romania
Slovenia
Latvia
Italy
Portugal
Hungary
Poland
Czech Republic
Bulgaria
EU&EFTAoveroe(184)
Labour taxes
Consumption taxes
21 14 24 59
15 40 8 63
10 40 30 80
20 34 31 85
24 15 48 87
21 48 24 93
40 45 25 110
50 36 36 122
25 64 38 127
25 65 40 130
26 80 26 132
23 92 24 139
40 60 40 140
29 78 40 147
20 40 96 156
33 90 44 167
49 54 67 170
32 85 58 175
78 46 78 202
30 134 43 207
42 62 103 207
40 118 58 216
90 96 74 260
31 139 94 264
39 198 32 269
63 116 96 275
35 146 96 277
62 124 100 286
94 217 102 413
33 256 165 454
Numberofpoyments
Tleuveiugenumbeiolpuyments
ut12.8loitlisiegionistlelowest
upuit liom Noitl Ameiicu
(see Figuie 2.39). Tlis low numbei is
essentiullyulunctionoltlelucttlut
upuitliomtwoeconomies(Romuniu
undSwitzeilund),ulleconomiesintle
iegionluveimplementedelectionic
ling und puyment loi ut leust two ol
tletlieemujoituxes.OnlyIcelund,
CypiusundRomuniuluveunumbei
wliclisubovetleglobuluveiuge.
Thetrends
Figuie 2.40 slows low tle tliee
PuyingTuxesindicutoisluvelullen
oveitleeigltyeuisoltlestudybut
ulsolowtlislulllusstulledloitle
TotulTuxRute.
TotolToxRote
TleTotulTuxRuteluslullenintle
iegioneuclyeuisincetlestudy
begunupuitliomintlemostiecent
yeui.BetweenPuyingTuxes2012und
PuyingTuxes2013tleuveiugeiute
incieusedby0.1%.
Tlisincieuseintlemostiecentpeiiod
isluigelydiivenbyEstoniu.Tlis
economy mude tle most signicunt
incieuseinitsTotulTuxRute
(by 8.7%), ieecting tle lull yeui
impuctolunudditionulsulestux
wliclisculculutedbyieleience
totuinovei,undwusoiiginully
intioduced in June 2010. A numbei
oleconomiesieducedtleiiTotulTux
Rutes,witlHunguiy,Gieeceund
tleUKmukingtleluigestcuts.In
Hunguiy,tleeconomywitltleluigest
ieductionoveitletwelvemontls
sincetleluststudy,tlecommunity
tuxwusubolisled.IntleUKtlemuin
iuteolcoipoiutiontuxwusieduced
liom28%to26%wlileinGieecetle
coipoiuteincometuxiutecontinuedto
be ieduced liom 24% to20%.
Norway
Sweden
Malta
France
Latvia
Czech Republic
Estonia
Finland
Greece
Ireland
Portugal
Spain
United Kingdom
Germany
Netherlands
Denmark
Belgium
Lithuania
Slovenia
Austria
Hungary
Bulgaria
Italy
Poland
Switzerland
Slovak Republic
Luxembourg
Cyprus
Iceland
Romania
EU&EFTAoveroe(12.8)
Prot taxes
Labour taxes
Other taxes
1 1 2 4
1 1 2 4
1 1 4 6
1 2 4 7
1 1 5 7
1 2 5 8
1 7 8
1 3 4 8
1 1 6 8
1 1 6 8
1 1 6 8
1 1 6 8
1 1 6 8
2 1 6 9
1 1 7 9
3 1 6 10
1 2 8 11
1 2 8 11
1 1 9 11
1 3 8 12
3 2 7 12
1 1 13 15
2 1 12 15
1 1 16 18
2 7 10 19
1 1 18 20
5 12 6 23
5 12 11 28
1 1 27 29
4 12 25 41
Figure 2.39: The number of payments in the EU & EFTA
Oveitleeigltyeuisoltlestudy
tleeconomiestlutluvemudetle
luigestieductionsintleiiiutesluve
beenSpuin,Romuniu,Bulguiiuund
Gieece.Tlislusluigelybeendiiven
by signicunt decieuses in coipoiute
incometuxbutcoupledwitlieductions
insociulsecuiitycontiibutionsin
RomuniuundBulguiiu.
Timetocomply
Tleuveiugelouistocomplyluve
lullenineucloltlelustsevenyeuisol
tlestudy,lullingby60louisoveiull,
includingulullol13louisintlemost
iecentyeui.
Tleeconomiesslowingtleluigest
lulloveitleeigltyeuisluvebeentle
Czecl Republic, Finlund und Bulguiiu.
Tlislusbeenluigelyduetoincieused
use ol und impioved electionic ling
undpuymentcupubilitiesundgieutei
elciencies in tux udministiution ovei
tle peiiod. Foi exumple tle Czecl
Republicmudeitmundutoiyloiull
tuxes to be led electionicully und loi
tleie to be unied ling, ieplucing tle
need loi sepuiute ling ol eucl tux to
dilleient uutloiities. A similui set ol
ieloimsweielollowedinBulguiiu.In
Finlund tley luve simplied iepoiting
und puyment loi VAT und loi luboui
tuxes.Inotleieconomies,Hunguiylus
simplied its tuxes und tux buses wlile
TleNetleilundsieducedtleliequency
ol ling und puyments loi VAT.
Numberofpoyments
lullensteudilyoveitlepeiiodoltle
studyintlisiegion,by8.Spuymentsoi
justovei1puymentineuclyeui.
IntlemostiecentyeuiRomuniu
ieducedtlenumbeiolpuymentsliom
113to41.Tlisdiumuticieductionis
luigelyduetotleimplementutionol
newlegislutioniequiiingemployeis
tosubmitjustonejointpuyiollietuin
loiulltlesociulcontiibutionsundtle
employmentincometux.
Oveitleeigltyeuipeiiod,itis
electionic ling tlut lus been tle
mujoidiiveioltleoveiullieductionin
tleiegion.
Figure 2.40: The indicator trends for the EU & EFTA
60
50
40
30
20
10
300
250
200
150
100
50
Time (Hours)
Total Tax Rate
Payments
Time
Percentage/Payments
At 46.8% tle Geimun Totul Tux Rute
isstillliglcompuiedwitltlewoild
uveiugeol44.7%undtleuveiugein
tleEUol42.6%.
TleTotulTuxRuteloitle2013study
lusincieusedsligltlycompuiedtotle
46.7%intlepieviousyeui,duemuinly
toclungesmudetotlesociulsecuiity
contiibutions.Tlecontiibutionsloi
unemploymentinsuiunceincieused
liom2.8%to3.0%undtleleultl
insuiuncecontiibutionsioseliom
14.9%to1S.S%.Tlisincieusewus
puitlyollsetbyminoiieductionsintle
ussessmentceilingsloileultlundlong
teimcuieinsuiunce.
Tlesociulsecuiitycontiibutionsudd
upto21.8%wliclisulmostlulloltle
TotulTuxRute.Tlisligllevelolsociul
secuiitycontiibutionistlesubject
olongoingdebuteunduconceintlut
tleieneedstobeuieductionwitltle
uimolieducingtlecostolluboui,
undincieusingtleincomeuvuiluble
loiemployeestospend.Recent
discussionsbetweengoveinmentund
tleoppositionpuitiesuiounduvoiding
poveityinoldugeundlowtliswillbe
lundedsuggeststlepotentiulloisucl
ieductionsmuybelimited.
Twotuxestlutcontinuetouttiuct
mediuuttentionuietlesoliduiity
suicluigeundtletiudetux.Tle
soliduiitysuicluigewusoiiginully
intioducedin1991tocoveitlecostsol
tle Geimun ieunicution, but lus been
ietuinedusuieguluielementtocovei
geneiulgoveinmentexpendituie.
Fiom time to time tleie is debute
uioundwletleitlistempoiuiytux
isstillnecessuiy,ustleconditionsin
tle new stutes luve signicuntly
impiovedintlelusttwodecudes,
oiilindeeditisstillconstitutionul;
uccoidingtouiecentdecisionol
Geimunysledeiulconstitutionulcouit
tlis is tle cuse. As ieguids tle tiude
tux,ceituintiudeussociutionsund
politiculpuitieswouldliketoseeit
ubolisledoiutleustlundumentully
ieloimed,wleieusloculuutloiities
continuetoinsistonietuiningtletux
usitisunimpoituntsouiceolievenue
undulso,usitisoneinstiumentoltux
policywliclisuvuilubletotlem.
Aguinst tle buckgiound ol public
discussiononieducingpublic
debtunddeulingwitltlesteudily
giowingdispuiityolincomesund
weultl,udebutelusstuitedontle
ie-intioductionolweultltux.Tle
iesultsoltlegeneiulelectiontotle
GeimunBundestuginuutumn2013uie
expected to luve u signicunt impuct
onlutuiedevelopmentsinGeimuntux
policymuking.
Germony
A giowing momentum to intioduce e-ling
Dr. Tobias Taetzner
PwC Germany
Witlintle2013PuyingTuxesstudy
tlepuymentsindicutoiluslullen
bytlieepuymentscompuiedtotle
pieviousyeuiwlicliesultsliomtle
intioduction ol mundutoiy e-ling
loicoipoiutiontuxundtiudetux
ietuins loi scul yeuis 2011 onwuids.
Coipoiutiontuxnowonlyuccountsloi
onepuymentpeiyeui,usopposedto
loui. In tle pievious yeui e-ling wus
optionul loi tiude tux und VAT, but not
possibleloicoipoiutiontux.
Compuiedtotle2012studytle
timetocomplylellliom221to207
louis ieecting tle cuncellution ol
tletesting-pluseoltlesoculled
ELENA-pioceduie. ELENA wus to
iequiiecompuniestoelectionicully
le suluiy-ieluted dutu ol ull its
employeestoucentiuldutubuseon
umontllybusistolelpeliminute
tleneedloiemployeistomunuully
cieute income-ceiticutions wlicl
luvetobeissuedbyemployeisut
tleiequestoltleiiemployeesloi
tlepuiposeolpiesentingtlemto
goveinmentugencies.Howeveidue
todutu-piotectionconceinsundtle
udministiutivebuidenloiemployeis
identied duiing tle testing-pluse
ELENA lus been witldiuwn.
A luitlei e-ling development loi
tlelutuiewillbetleobligutionto
submittuxuccountselectionicully
liom 2013 onwuids using un olciul
tuxonomy. Altlougl tuxpuyeis
willnotbeiequiiedtoinstullunew
uccountingsystemoitoiemodeltleii
cluitoluccounts,tleimplementution
ol tle e-ling ol tle tux uccounts is
likelytocuuseusmullincieuseintle
udministiutivebuidenundtletime
tocomplyindicutoiinPuyingTuxes.
In piepuiution loi e-ling loi tle ist
yeui,tuxpuyeiswillneedtomuptleii
uccounts to tle olciul tuxonomy und
toimplementupiocesswliclenubles
u tiunslei ol tle GAAP (Geneiully
Accepted Accounting Piinciples)
uccountstotletuxonomyintleloim
ol un XBRL-le (eXtensible Business
RepoitingLunguuge)wliclistlen
electionicullysubmittedtotletux
uutloiities.Inlutuieyeuisclungesin
tlecompunyscluitoluccountsoitle
olciul tuxonomy will luve to be kept
undeiieviewtoensuieuppiopiiute
udjustment to tlemupping.
TleEuiopeunluuncleventloi
PuyingTuxes2012wlicltookpluce
inGeimunylustyeuiwusjoined
byiepiesentutivesliombusiness
ussociutions,politics,tletux
udministiutionundtlepiessund
piesentedunexcellentoppoitunityto
engugeinuconstiuctivediuloguewitl
tlegoveinmentundtletuxuutloiities
ontlelutuieslupeoltleGeimuntux
system.Oneoltlekeyissuesdiscussed
wustleneedolbusinessesloiu
ieliubleundstublepolicyinieguidto
tuxutionissuestoenubletlemtoplun
businessdecisionsuccoidingly.
46.8%
207 9
Hunory
Hunguiy ut u tuining point muking signicunt clunges to
sculpolicy
Norbert Izer
PwC Hungary
TuxesstudyHunguiylusslownsome
impiovementinitsindicutois,tlemost
signicunt being u lull in tle numbei ol
louisloituxcompliunceby63louis.
ButtlelouistocomplyundtleTotul
TuxRutestilllieubovetleEuiopeun
undwoilduveiugeswliclsuggests
tlut cieuting u luvouiuble scul
enviionmentisstilluclullenge.
BeingumembeioltleEuiopeunUnion
in2012doesnotguuiunteeeconomic
stubility. As is tle cuse loi muny
otleiEuiopeuneconomies,Hunguiy
continuestosulleiliomtlevolutile
economicpositiontluttioublestle
Union.Insucltimesgoveinments
luveuligllydemundingioleto
ensuiemeusuiesuieimplementedtlut
williesultinupiedictublebusiness
enviionmentuswellususecuie
eveiyduylileloitleiicitizens.
Besideslookingtoconsolidutetle
iecoveiyusieguidstleHunguiiun
budget,tlegoveinmentisuimingto
cieute u moie stuble scul enviionment
tolelpdeulwitltleongoing
Euiopeunciisis.Recenteconomic
stutisticsgivesomelopelulsigns.
As u iesult ol stiict economic policy
und tle commencement ol EU/IMF
negotiutions loi Hunguiy specicully,
tleyslowucleuiimpiovementloi
Hunguiyintlesecondquuiteiol
2012. As u iesult tle Excessive Decit
PioceduieuppliedbytleEuiopeun
Union to countiies tlut exceed u decit
ceilingwusliltedloiHunguiy.Itis
quitestiikinglowgoveinmentdebt
ieducedliom82%olGDPin2010to
74% by tle end ol 2011. And loi 2012
tleloiecustisevenmoieluvouiuble
witlunexpectutiontlutHunguiywill
piobublybeubletokeeptlebudget
decit tuiget below 3%. Tle stutistics
indicutetlutubudgetsuiplusol4.3%
wus iecoided us ol Apiil 2012 loi 2011.
As puit ol tle oveiull economic
policy tleie is u signicunt clunge
in piogiess us ieguids tle scul
policyolgoveinment.Tleieisucleui
objectivetoieducetuxesonincome
undincieusetuxesonconsumption.
Tleiuteolcoipoiuteincometuxlus
beensubstuntiullyieduced.Nowloi
u tux buse up to HUF S00 million
(uioundEUR1.7million)tlecoipoiute
incometuxiuteis10%undubovetlis
tliesloldtleiuteis19%.Beloie2012
tle tlieslold wus HUF S0 million
(uioundEUR0.17million).
Anotlei signicunt ieloim took
pluceloipeisonulincometuxution.
A piogiessive peisonul income tux
iegime wus iepluced by u ut peisonul
incometuxiuteol16%ellectiveliom
Junuuiy2012wliletuxcieditsund
supei giossing weie ubolisled. A
numbeioltiunsitionulmeusuiesweie
intioducedulongwitltuxincentives
loilumiliesiuisingclildiento
ucknowledgetleimpoitunceollumily
undtolelpstemtletiendtounuging
populutionoveitlelongteim.
Tleobviousquestionislowwilltlese
tux cuts be nunced? Tle goveinment
iesponseistointioducemeusuiesto
iuisetuxesontloseindustiieswlicl
uieconsideiedtoluveextiuoidinuiy
piots. Austeiity tuxes tleieloie
nowupplytobunks(includingu
nunciul tiunsuctions tux), insuiunce
compunies,eneigycompunies,ietuileis
undtelecommunicutionscompunies.
SincetlePuyingTuxescusestudy
compunyisbusedonumunuluctuiing
compuny,tleuusteiitytuxesiuisedon
tleseivicepiovideismentionedubove
willluvenoimpuctontuxliubilitiesol
tlemodelcompuny,sotluttleiecent
clungesintletuxenviionmentuienot
lully ieected in tle iesults.
As is cleui liom tle ubove puiugiupls,
tleHunguiiungoveinmentuimsto
cieuteuwellstiuctuied,sustuinuble
undpiedictubletuxiegimeinoideito
lelpstubilisetleeconomyundensuie
tlut tle budget decit tuigets uie met.
50.3%
277
12
TleluuncloltlePuyingTuxesstudy
isoneoltlemostunticiputedevents
oltleyeui,uttiuctingwidespieud
uttentioninpoliticulundeconomic
ciiclesundintlemediu.
Tledutupiovidedbytlestudyis
iecognisedusuglobulieleiencepoint
loituxieloim,lelpinggoveinments
uioundtlewoildtoidentilygood
piucticesundpossibleieloims.
Portuol
Helpingtocieuteunuttiuctivedestinutionloidoingbusiness
Jaime Esteves
PwC Portugal
Ovei tle pust yeuis scul sustuinubility
undeconomicgiowtlluveund
continuetobekeyconceinswlicl
uie imly on tle Poituguese ugendu.
TlelocusloiPoituguesebusiness
policylusbeensliltinguwuyliomu
puiedomesticpeispectivetowuids
tleumbitiousgoulolpiovidingun
enviionmentwlicllelpsPoitugulto
becomeunuttiuctivedestinutionloi
doingbusiness.Howevei,tlecuiient
economic und nunciul dilculties
lucedbytlecountiymuyslowdown
expectutionsintlisieguidundwlut
cunbeuclievedintlesloitteim.
Recognisingtlesepioblems,tle
Poituguese Tux Autloiities uie
ieciuitingluitleisuppoitpeisonnel
tolelpmuketlepiocessloicomplying
witltuxobligutionssimplei,lustei,
und less expensive, putting signicunt
elloitintopiovidingquickund
ellectiveunsweistotuxpuyeis
queiies,undlelpingtoestublisl
tledevelopmentoluielutionslipol
mutuultiust.
Anotlei uspect wlicl iequiies
signicunt impiovement is to lelp witl
iesolvingtlelongteimtuxdisputes
wliclexistbetweentuxpuyeisund
tletuxuutloiities,wliclcunolten
piovediscouiugingloiinvestois.In
oideitooveicometleseissuesutux
uibitiutioniegimewusintioducedin
2011,uimedutincieusingtlespeedol
tleiesolutionoldisputesundlelping
toieducetletimetuken.
Despitetlelucttluttlesemeusuies
uiewelcomedbytlepublicingeneiul,
itiscommonlybelievedtluttleieis
uneedloiuctiontoimplementmoie
stiuctuiultuxieloimswliclmuylelp
leudtounimpiovementintlePuying
Tuxesiunking,lopelullylosteiingun
eusieienviionmentloidoingbusiness
inPoitugul.
42.6%
275
8
Poitugulnowstundsut77intle
iunkingloiolPuyingTuxes2013.
Wliletlenumbeiolpuyments
indicutoilusbeenstubletliouglout
tleeigltyeuisoltlestudyundtle
TotulTuxRuteluslullenonlysligltly,
tletimetocomplyluslullenby
S3louis.
Intlepust,udistinctivecluiucteiistic
oltlePoituguesetuxsystemwus
tluttuxcompliuncewusnotuneusy
oiugilepiocess.Howevei,witl
tleintioductionolE-goveinment
meusuies (electionic ling und
puyment),in2006witltleSimplex
piogiumme,tleentiiepiocessol
ling tux ietuins wus stieumlined,
undtleinteiuctionwitltuxpuyeislus
substuntiullyimpioved.
Altlougl tlese meusuies luve tuken
Poitugulintleiigltdiiection,
sustuinedimpiovementisstilliequiied
inunumbeioluieus,ussuggestedby
tleiesultsoltlePuyingTuxesstudy
wleietletimetocomply(27Slouis)
iemuinsubovetlewoilduveiuge
(267 louis). An exumple is, tle
liequencyolclungetotletuxiules
wlicl olten leuds to signicunt elloit
toupdutepioceduies,undwlicl
contiibutes to signicunt unceituinty
uiound tle tuxsystem.
Spoin
Fuitlei steps tuken to impiove tle collection ol tux ievenues
Santiago Barrenechea
PwC Spain
Tuxesstudy,tleindicutoisloiSpuin
luveslownconsistentimpiovement.
Tletimetocomplyluslullenliom
298louisinPuyingTuxes2006to
167louisintlemostiecentstudy,
ieecting impiovements mude
to tle electionic ling piocesses.
TleTotulTuxRuteluslullenliom
61.8%to38.7%oveitlesume
peiiod wlicl ieects clunges mude
totlecoipoiutiontuxundsociul
contiibutioniegimes.
Iniecentyeuis,tleleeblestuteoltle
Spunisleconomylusludunegutive
impuctontuxievenue,loicingtle
goveinmenttotukeluitleisteps
toensuieieusonubletuxievenues
uiecollectedin2012wliclwillbe
ieected in lutuie editions ol tle
Puying Tuxes study. Altlougl most
oltlemeusuieswillluveulimited
duiution,onlyullectingievenuesin
2012und2013,tlewuytleundeilying
economymovescouldulteitle
scenuiio signicuntly.
Tle most signicunt clunges ullect
coipoiutiontux,ultlougltleseuie
notexpectedtogeneiutetlemost
signicunt incieuse in tux ievenue.
Tle ist meusuie is to ieduce tle
tux deductions ullowed loi nunciul
expenses.Tlus,usliom1Junuuiy
2012, net nunciul expenses cun only
besetolluguinsteuiningsuptou
muximum ol 30% ol EBITDA (euinings
beloieinteiest,tux,depieciutionund
umoitisution),witluminimumolone
millioneuio.Tleumountnotdeducted
muybecuiiiedoveitotlelollowing
yeui,tlouglwitlsomelimitutions.
Tlis iule muinly ullects nunciul
expensesuiisingliomcoipoiute
boiiowing,ieguidlessolwletlei
tleumountsboiioweddeiiveliom
ielutedpuities.Non-deductibilityol
nunciul expenses is ulso ieguluted
wlenexpensesdeiiveliomumounts
boiiowedtobuysluieswitlinu
gioup,unlesstlecompunycunslow
udequuteeconomicgioundstojustily
suclnuncing.
Compuniespiesentpieiogutiveto
settleiiowniuteoldepieciutionon
new xed ussets, u meusuie tlut wus
oiiginullytocontinuetliougl2014,
lus now been witldiuwn. A muximum
limitlusulsobeenimposedontux
deductionsloigoodwill,wletlei
uiisingliomcoipoiutetukeoveisoi
meigeis1%inbotl2012und2013.
Witliespecttocoipoiutetuxon
udvuncepuyments,tlegoveinment
lusincieusedtlepeicentugesloi
luige-undmedium-sizedcompunies
toupto29%oltlelullumount
puyuble. At tle sume time, tle udvunce
puymentscunnotbelesstlun12%ol
iepoitedpiot.
VAT lus ulso incieused liom 1
Septembei2012.Tlegeneiuliuteiose
liom18%to21%,wliletleieduced
iute incieused liom 8% to10%.
As lui us individuul income tux is
conceined,tlegoveinmentlus
incieusedtlemuiginulincometux
iutes,meuningtlut,dependingon
tleiiiesidence,individuulseuining
moietlunEUR300,000peiunnum
will be tuxed ut moie tlun S0%. At tle
sumetime,cupitulguins,including
inteiestunddividendincome,
pieviouslytuxedutumuximumiute
ol21%,willnowbetuxedutunew
muximumol27%.
Fuitleimoie, tle goveinment lus
intioduced,onunexceptionulbusis,
tlepotentiultodecluieuspeciul
tuxietuinloipeisonulincometux,
peisonulincome-tuxloinon-iesidents
undcoipoiutiontux.Tlepuiposeol
tlisnewspeciulietuinistocollecttux
ongoodsundeuiningsnotpieviously
decluied,wliclwillnowbetuxed
utuiuteol10%oltleiiucquisition
vulue. Tle ling ol tlis ietuin und tle
ielevunttuxpuymentmustbemude
piioi to 30 Novembei 2012. Fullment
oltlisobligutionwilluvoidtle
possibilityollutuieudministiutiveoi
ciiminulpenulties.
Tlisyeuiuiegionulluuncloltle
PuyingTuxesiepoitisbeingleldin
Mudiidwliclwillpiovideugood
oppoitunityloitleseissuestobe
discussedundtoconsideilowtlese
mostiecentclungesmuyimpuctontle
PuyingTuxesindicutois.
38.7%
167
8
Thereionolonolyses
MiddleEust
21
TleMiddleEusteinstutes
luvetleleustdemundingtux
systemsloiouidomesticcuse
studycompuny.
uciosstleMiddleEustis1S8
louis uguin u Figuie wlicl is
wellbelowtleglobuluveiuge
undtlelowestloiunyiegion.
tleiegionis23.6%,wellbelow
tlewoilduveiuge(44.7%)und
tlelowestolunyiegion.Tle
liglelementloilubouituxes
undsociulcontiibutionsisu
commonleutuieloiulmostull
tleeconomiesintleiegion
(butstillbelowtlewoild
uveiugeol16.2%).
Tlenumbeiolpuymentsin
tlisiegioniskeptlowinview
oltlelowuveiugenumbeiol
tuxeswliclistlelowestolull
tleiegions,buttosomeextent
tlisiscompensutedbytle
geneiullowuseolelectionic
ling und puyment.
Recentieductionsintle
numbeiolpuymentsindicutoi
ieect tle intioduction ol
electionic ling undpuyment.
21
The following economies are included in our analysis of the Middle East: Bahrain; Iran, Islamic Rep.;
Iraq; Jordan; Kuwait; Lebanon; Oman; Qatar; Saudi Arabia; Syrian Arab Republic; United Arab Emirates;
West Bank and Gaza; Yemen, Rep.
MiddleEost
Regionuluiticle,
puge113
110 7KHUHJLRQDODQDO\VHV0LGGOH(DVW
The 2013 tox prole
IntleMiddleEustiegionlubouituxes
undsociulcontiibutionsuccountloi
tleluigestpuitoltleTotulTuxRute,
tlenumbeiolpuyments,undtletime
to comply, u piole wlicl is quite
dilleient to tle uveiuge globul piole
(see Figuie 2.41).
TotolToxRote
iegionis23.6%,wellbelowtlewoild
uveiuge(44.7%)undtlelowestol
uny iegion (see Figuie 2.42). Tle
elementloilubouituxesundsociul
contiibutionsisucommonleutuie
loiulloltleeconomiesintleiegion
upuitliomWestBunkundGuzuwleie
nolubouituxesuieleviedontle
employei.Itisulsowoitlnotingtlut
unumbeioltleoil-iicleconomies
(Kuwuit,Qutui,Buliuin,Suudi
Aiubiu, und tle United Aiub Emiiutes)
continuetoluvelittleoinocoipoiute
incometuxuppliedtoouicusestudy
compunywliclexpluinswlytle
oveiulluveiugeTotulTuxRuteisso
low.Tleubsenceolconsumptionund
otleituxesulsolelpstoexpluintlis
uveiugeiute.
Timetocomply
Tleuveiugetimetocomplyucioss
tle Middle Eust is 1S8 louis, u guie
wlicliswellbelowtlewoilduveiuge
undtlelowestloiunyiegion.
Figuie 2.43 slows tlut loi muny ol
tleeconomies,lubouituxesundsociul
contiibutionsuietlepiimuiydiiveis
oltletimetocomply,butinYemen
tlegoodsundseivicestuxtukestle
longesttimetocomplywlilstintle
Syiiun Aiub Republic it is coipoiute
incometux.
Figure 2.41: The tax prole for taxes borne in the Middle East
Prot taxes
Labour taxes
Other taxes
31%
16%
28%
56%
2%
59%
59%
39%
10%
Figure 2.42: Total Tax Rates in the Middle East
Figure 2.43: Time to comply in the Middle East
Kuwait
Qatar
Bahrain
Saudi Arabia
United Arab Emirates
West Bank and Gaza
Oman
Jordan
Iraq
Lebanon
Yemen, Rep.
Syrian Arab Republic
Iran, Islamic Rep.
MiddleEostoveroe(23.6)
Prot taxes
Labour taxes
Other taxes
10.7 10.7
11.3 11.3
13.5 0.4 13.9
2.1 12.4 14.5
14.1 0.8 14.9
16.2 0.6 16.8
10.0 11.8 0.1 22.0
12.9 12.9 2.3 28.1
14.6 13.5 28.1
6.1 24.1 30.2
20.0 11.3 1.6 32.9
20.0 19.3 0.4 39.7
17.8 25.9 0.4 44.1
Bahrain
Qatar
Oman
Saudi Arabia
Kuwait
Jordan
West Bank and Gaza
Lebanon
Yemen, Rep.
Iraq
Iran, Islamic Rep.
MiddleEostoveroe(158)
Labour taxes
Consumption taxes
12 12
36 36
12 36 48
50 12 62
32 40 72
98 98
10 90 51 151
10 96 48 154
40 100 40 180
56 72 120 248
24 288 312
300 36 336
32 240 72 344
Numberofpoyments
tle iegion is 17.6 (see Figuie2.44),
wlicliswellbelowtlewoilduveiuge,
but Noitl Ameiicu und tle EU & EFTA
luveloweiuveiuges.Tlenumbei
olpuymentsintlisiegioniskept
lowbytlesmulluveiugenumbeiol
tuxeswliclistlelowestolulltle
iegions,buttosomeextenttlisis
compensutedbytlegeneiullowuseol
electionic ling und puyment lucilities
puiticuluilyloilubouituxesund
sociul contiibutions, und VAT systems.
Itisulsoolnotetlutitistleligl
incomeeconomiestlutluvetleless
demundingtuxsystems,ustleypluce
ugieuteiieliunceonotleisouicesol
ievenuetluttlelesswellolleconomies
donotluve.
Thetrends
Figuie 2.4S slows tlut tle Puying Tuxes
indicutoisluveiemuinedveiystuble
tliouglouttleeigltyeuisoltlisstudy.
TotolToxRote
TleTotulTuxRuteluslullenbyonly
2.S%loitleiegionsincePuyingTuxes
2007 und lus iemuined ut in tle most
iecentyeui.BetweenPuyingTuxes
2006und2007tleTotulTuxRutelell
liomunuveiugeol41.4%to28.1%.Tlis
luigely ieected tle ieplucement ol tle
pioductiontux(wliclwusucuscuding
tux)witlusulestuxbyRepublicol
Yemen.Moieiecentlytliseconomyulso
ieducedtleiuteolitscoipoiuteincome
tuxliom3S%to20%in2010.
Tleie lus been no signicunt
movementintleTotulTuxRuteloiuny
oltleMiddleEusteconomiesintle
mostiecentyeui.
Timetocomply
iegion lus iemuined viituully ut
since2004.Tleiegionlustliouglout
tlestudypeiiodiequiiedtlelewest
numbeiollouisloiieusonsusieleiied
toubove.
Numberofpoyments
iemuinedstubletliougloutmostol
tlestudypeiiod.Tleielusbeensome
ieductionoveitlelustyeuidiiven
bytleimplementutionolonline
ling und puyment systems by Suudi
Aiubiu und tle United Aiub Emiiutes.
Tleseimpiovementsielutetosociul
secuiitycontiibutions.
Figure 2.44: The number of payments in the Middle East
Figure 2.45: The indicator trends for the Middle East
Saudi Arabia
Qatar
Kuwait
Bahrain
Iraq
Oman
Lebanon
Iran, Islamic Rep.
Jordan
West Bank and Gaza
Yemen, Rep.
.
MiddleEostoveroe(17.6)
Prot taxes
Labour taxes
Other taxes
1 1 1 3
1 1 2 4
1 3 4
12 12
12 1 13
1 12 13
1 12 1 14
1 12 6 19
2 12 5 19
1 12 7 20
1 12 12 25
14 12 13 39
1 24 19 44
2004 2005 2006 2007 2008 2009 2010 2011
50
40
30
20
10
0
250
200
150
100
50
0
Time (Hours)
Total Rax Rate
Payments
Time
19.3
Percentage/Payments
Intlepustyeui,undsincetle
publicutionolPuyingTuxes 2012,tle
MiddleEustlusexpeiiencedmoie
tuimoiltluneveibeloie.Totulituiiun
iegimesluvetumbledundotleismuy
lollow. Tle so-culled Aiub Spiing
lusledtouclungeintleiegimes
in Aiub Republic ol Egypt, Libyu,
TunisiuundtleRepublicolYemen,
wleieeconomicinjusticeundpoveity
continue.Intleoiliiclcountiies,
tleieluveulsobeensomeunsettled
peiiods.Howevei,suclcountiiesluve
tuken swilt meusuies to deluse dilcult
situutionsbypiovidingeconomic
stimuluspuckugesundulsodiiect
cuslpuymentstocitizens,wlilestill
ielyingoncontinuedincomeliomoil
ievenues.Inlessloitunuteeconomies,
goveinmentsluvetuinedtoun
incieuseinboiiowingundtuxesin
oidei to nunce necessuiy ussistunce
loicitizens.
Despitetlesemujoidistuibingevents,
MiddleEusteingoveinmentsluvenot
soluicuiiiedoutmujoiclungesto
tleii tux iegimes und tlis is ieected
intleiesultsoltlePuyingTuxesstudy.
Tleindicutoisluvebeenveiystuble,
undtleTotulTuxRuteundtletime
tocomplyindicutoissuggesttluttle
iegionistleleustdemundingwitl
ieguidtoPuyingTuxes.Tleieuieu
numbeiolieusonswlytleiegionlus
ietuineduleudingpositionintlestudy.
Ononelund,tleintioductionolnew
tuxesundtlestudyoltleiipotentiul
impuctlusbeenulongslowpiocess
intleiegion.Newtuxesluvenotyet
beenintioducedundtleiegionis
stillcluiucteiisedbylowtuxiegimes
witllewtuxesloidomesticinvestois.
Ontleotleilund,usdiscussedin
pieviousissuesolPuyingTuxes,wlut
luslelpedkeepsomeoltleGull
CoopeiutionCouncil(GCC)countiies
uttletopoltlePuyingTuxesiunkings
istlutwliletlecusestudycompuny
isuwlollydomesticcompuny,most
GCCcountiiescoipoiutetuxluwslook
totuxloieigninvestoismoieleuvily,
undlocullyownedentitiesuieulmost
exemptliomtux(witltleexception
ol Omun). Finully, tle luck ol sules
tuxesundotleiindiiecttuxeslusulso
lelpedkeeptlecompliuncebuidenut
ulevelbelowtlewoilduveiuge.
MiddleEost
Tleneedtoincieusetuxievenuesundtleclungingtux
enviionmentintleMiddleEust
Wadih AbouNasr
PwC Lebanon
Eventlougltleimmediuteimpuctol
iecenteventsintleMiddleEustund
tlewoildwideeconomicciisislusnot
diiectlytiunslutedintomujoiclunges
geneiullyintuxpolicies,somenew
tuxluwsluvebeenimplementedbyu
lewMiddleEusteincountiiesunditis
mostlikelytlutotleimujoiclunges
willlollowintlecomingyeuis.Tle
mostiecentmujoiclungeswoitl
mentioningleieuienewincometux
luwsinQutuiundJoidun,uswellus
newtiunsleipiicingiegulutionsin
Egypt.Weluveulsowitnessedtle
intioductioninEgyptolunudditionul
tuxbiucketloicoipoiutionsund
individuuls loi liglei piots und
income,undLebunonlusluiddownu
diultbudgetLuwloi2013wliclwill
contuinincieusesincoipoiuteund
individuultuxiutes,uswellusunuiiuy
olincieusesinindiiecttuxes(except
VAT wlicl iemuins ut 10%).
Witlincieusedspendingiequiiements
undpopulutionsdemundinggieutei
economiciiglts,tlegoveinmentsin
tleMiddleEustwillluceuclullenge
toiuiseudditionultuxievenuesintle
lutuie,eitleibyintioducingnewtuxes
(loi exumple VAT), expunding tle tux
buse(bytuxingcoipoiutionsownedby
citizens),oiincieusingtletuxiutes(us
somecountiiesluveulieudystuitedto
do).TleGCCcountiiescontinuewitl
tleii endeuvouis to intioduce u VAT
systemwitlutuigetloidoingsointle
nexttwotolouiyeuis.Tlisincludesun
intention to luimonise tle VAT luws
tlutwillbeintioducedbyudopting
u VAT liumewoik luw tlut will be
udoptedbyullGCCcountiies,mucl
liketleGCCCustomsUnionluwwlicl
existedpiioitotleintioductionolu
nutionul VAT luw. Tle question und tle
clullengewillbewletleitleMiddle
Eustcountiieswillbeubletoiemuin
eusyplucestopuytux.Witluslowing
woildeconomyundtlepotentiulloi
stugnutingoilpiices,goveinmentsin
botloilundnonoiliiclcountiieswill
luveuneedtoincieusetuxievenues
inoideitobuluncetleiibudgets,
unduttlesumetimestillpiovide
unuttiuctivebusinessenviionment
loiinvestois.
Onetlingisloisuie;clungeintle
MiddleEustisonitswuy.
23.6%
158 17.6
Thereionolonolyses
Noitl Ameiicu
22
At 42%, tle uveiuge Totul Tux
Ruteloitleiegionissligltly
belowtlewoilduveiuge.But
tlis disguises some signicunt
dilleiencesbetweentle
tlieeeconomies.
Tlelullimplementution
ol electionic ling systems
tlutullowsloionline
puyment und ling ol ull tux
obligutionsluslelpedieduce
compliuncelouis.
Higllevelsolcoipoiuteincome
tuxdiivetleiuteintleUnited
Stutes,lubouituxesundsociul
contiibutions uie signicunt in
Mexicowlilegeneiullylowei
iutesupplyinCunudu.
Cunudulusbeentlemuin
economydiivingtlelullintle
TotulTuxRute.
Itisolnotetluttletliee
economiesintlisiegionluve
ull implemented online ling
systemstlutlelptoieduce
tlecompliuncetimeiequiied
wliclslelpstokeeptlelouis
loweitlunmigltbeexpected
wleniecognisingtlutulltliee
economiesluvetuxsystems
wliclinvolvemultiplelevels
olgoveinment.
22
The following economies are included in our analysis of North America: Canada; Mexico; United States
Conodo
Countiyuiticle,
puge121
116 7KHUHJLRQDODQDO\VHV1RUWK$PHULFD
The 2013 tox prole
Wlile tle iesults loi tle Noitl Ameiicu
iegioncoveiuvustgeogiuplicuieu,
undsomeluigeeconomies,itslould
benotedtluttleyielutetoonly
tlieecountiies.Coipoiuteincome
tuxuccountsloitleluigestpoition
oltleTotulTuxRute,undtlelouis
to comply. Tle piole loi tle numbei
olpuymentsisloweveicloseitotle
globuluveiugewitlcoipoiuteincome
tuxonlyuccountingloi16%oltletotul
numbei ol puyments (see Figuie 2.46).
TotolToxRote
At 42%, tle uveiuge Totul Tux Rute
loitleiegionissligltlybelowtle
woilduveiuge.Buttlisdisguisessome
signicunt dilleiences between tle
tliee economies (see Figuie 2.47).
MexicoundtleUnitedStutesluve
ielutivelyliglTotulTuxRutesutS2.S%
und46.7%,wlileCunudusislowut
26.9%.Wlileulltlieeeconomiesuie
ledeiulstutes,Cunudulusembuiked
onunuctivepolicytoluimonise
iutesuciosstledilleientlevels
olgoveinment.
Higllevelsolcoipoiuteincometux
diivetleiuteintleUnitedStutes
loiouicusestudycompunywlicl
islocutedinNewYoikundissubject
toloculuswellusledeiulcoipoiute
incometuxes.Tleieuielouiluboui
tuxesboinebytlecompunyintle
United Stutes und ve otlei tuxes
ulsouddusmullumounttotletotul
tuxcost.
InMexicowlilecoipoiuteincome
tux is signicunt witl u iute ut tle
ligleiendoltlemoieusuuliunge,
tleieuietwolubouituxesundsociul
contiibutionstlutuieleviedongioss
suluiiessociulsecuiitycontiibutions
undemployeipuidpuyiolltux.
TlecusestudycompunyinCunudu
lusumucluloweiTotulTuxRuteut
26.9%, piot tuxes uccount loi only
8.4%oltleiutewlilelubouituxes
uccountloi12.7%undotleituxesloi
S.8%.Tleieuielouilubouituxestlut
uieleviedongiosssuluiiesinCunudu,
buttleiutesuieielutivelylow.
Figure 2.46: The tax prole for taxes borne in North America
Prot taxes
Labour taxes
Other taxes
48%
36%
30%
45%
25%
13%
39%
48%
16%
Figure 2.47: The Total Tax Rates in North America
Canada
United States
Mexico
NorthAmericooveroe(42)
Prot taxes
Labour taxes
Other taxes
8.4 12.7 5.8 26.9
27.6 10.0 9.1 46.7
24.6 26.5 1.4 52.5
Timetocomply
iegionut214louisisbelowtleglobul
uveiuge (see Figuie 2.48). Coipoiute
incometuxtukestlelongesttime
intleiegion.Tlisisdiivenbytle
systemsintleUnitedStutesund
Mexico,wlileinCunudutleullocution
oltimeismoieeven.
Itisolnotetluttletlieeeconomies
intlisiegionluveullimplemented
online ling systems tlut lelp to
ieducetlecompliuncetimeiequiied.
Consequentlytokeeptlelouis
loweitlunmigltbeexpectedwlen
iecognisingtlutulltlieeeconomies
luvetuxsystemswliclinvolve
multiplelevelsolgoveinment.
Numberofpoyments
tleiegionis8.3,tlelowestolunyol
oui iegions (see Figuie 2.49). All tliee
economiesintlisiegionluvelull
electionic ling und puyment wlicl
lelpstouclievetlislowuveiuge.Tle
ielutivelyliglnumbeioltuxesintle
UnitedStutesuiisesustlecusestudy
compunyissubjecttolouiluboui
tuxes und sociul contiibutions und ve
otleituxes.
Figure 2.48: The time to comply in North America
Figure 2.49: The number of payments in North America
Canada
United States
Mexico
NorthAmericooveroe(214)
Labour taxes
Consumption taxes
45 36 50 131
87 55 33 175
155 69 113 337
Canada
United States
Mexico
NorthAmericooveroe(8.3)
Prot taxes
Labour taxes
Other taxes
1 2 3 6
1 3 4 8
2 4 5 11
Thetrends
Tle Noitl Ameiicun economies luve
iegisteiedunimpiovementucioss
ulltletlieeindicutoisoveitleeiglt
yeuis ol tle study (see Figuie 2.S0).
Timetocomply
Tleuveiugetimetocomplylus
ieducedby118louisundisnowwell
belowtleglobuluveiuge.Mexicois
tlekeyeconomytlutlusimplemented
ieloimstlutluveledtotlisieduction.
Exumplesoltlemeusuiestuken
includetlelullimplementutionolun
electionic ling system tlut ullows loi
online puyment und ling ol ull tux
obligutions.Tlisluslelpedieduce
compliuncelouisliomSS2inPuying
Tuxes2004to337intlemostiecent
study. Also u new luw intioduced in
June 2010 ubolisled tle need to le un
unnuul VAT ietuin, us well us ieducing
tlesuppoitinginloimutiontlutwus
neededtobesubmittedtotletux
uutloiity.Tleieloimlelpedtoieduce
tle compliunce time loi VAT in tle
economyby71louis.
TotolToxRote
TleTotulTuxRuteluslullensteudily
oveitleeigltyeuisoltlestudyund
lusulwuysbeenbelowtlewoild
uveiuge.Tlelusttlieeyeuislus
loweveiseentleiuteoltlisieduction
slow.Cunudulusbeentlemuin
economydiivingtlelullwitlits
iuteieducingliom49.1%inPuying
Tuxes2004to26.9%inPuyingTuxes
2011.Vuiiousieloimsinitiutedbytle
goveinmentsolOntuiioundCunudu
in2009luvebeenkey,especiullytle
ieductionoltleiuteloicoipoiute
incometuxto12%oveiutliee
yeuipeiiod.
Mexicoludulsobeenpiogiessively
ieducingitscoipoiuteincometuxiute
liom33%inPuyingTuxes2008to28%
inPuyingTuxes2011.Itlusincieused
uguinto30%intlemostiecentpeiiod,
butisduetolulluguinoveitlenext
twoyeuis.
2004 2005 2006 2007 2008 2009 2010 2011
60
45
30
15
0
400
300
200
100
0
Time (Hours)
Total Tax Rate
Payments
Time
Percentage/Payments
Figure 2.50: The trends in North America
Numberofpoyments
BotlMexicoundCunuduluve
implementedvuiiousieloimswlicl
luveludupositiveellectontle
numbeiolpuyments.
InCunudu,tleluimonisutionol
coipoiuteincometuxiutesbetween
Ontuiioundtleledeiulgoveinment
undtleintioductionolcombined
puyments und tle ling ol u single
coipoiuteincometuxietuinwitlellect
liom2009lelpedieducetlepuyments
indicutoi.InJuly2010,tle8%Ontuiio
ietuilsulestux(RST)undS%ledeiul
sulestuxweiecombinedintousingle
13%luimonisedsulestux(HST)
wlicluguinieducedtlenumbeiol
puymentsiequiiedtocomplywitl
consumptiontuxes.
InMexicotleielusbeenlull
implementution ol online ling und
puymentlucilitieswliclintuinlus
enubled joint ling und puyments ol
unumbeioltuxes.InOctobei2010
consoliduted ling und puyment ol
montlly VAT, coipoiute income tux und
IETU(ImpuestoEmpiesuiiuluTusu
Unicu)ietuinsbecumepossibleusing
tleMexicuntuxuutloiitieswebsite.
Tlenewsystemledtouieduced
numbeiolpuyments,unduligltei
buidenloituxpuyeis.
Lincoln K. Schreiner
PwC Canada
Conodo
Pioudtobeintletoptenbutimpiovingtuxpolicyisunevei
endingpiocess
Cunudulustlieelevelsolgoveinment
tlutcunlevytuxes:ledeiul,iegionul
(piovinceoiteiiitoiy)undcommunity
(city oi municipulity). Foi most tux
lings, tux is sell-ussessed (tle lonoui
system). Once mude, tux lings uie
subjecttoieview(uudit),ustle
ielevunt tux udministiutois see t.
Tleledeiulundiegionul
udministiutionsluvebeenwoiking
togetleitouclieveuninteinutionully
competitive2S%combinedledeiul
undiegionulcoipoiuteincometuxiute
bytle2012culenduiyeui,inuddition
toieducingtletuxcompliuncecosts
olCunudiuncoipoiutions.Tliswoik
continues,undoveitlepustlew
yeuis signicunt piogiess lus been
mude,notubly:
TlepiovinceolOntuiioudopted
tleledeiulcoipoiuteincometux
iegime,sotlutnoweucllegul
coipoiution must le only u single
(combinedledeiulundpiovinciul)
coipoiuteincometuxietuin.
Munyiegionsluveudoptedtle
ledeiulvulueudded(goodsund
seivices)tuxiegime,sotlutnow
eucl legul coipoiution must le
onlyusingle(combined)vulue
uddedtuxietuin(ultlougltle
piovinceolBiitislColumbiulus
iecentlydecluieditsintentionto
witldiuwliomtleledeiuliegime).
Tleledeiulgoveinmentunnounced
tlutitwillwoikwitltleiegions
to peimit u coipoiute gioup to le
usinglecombined(consoliduted)
Cunudiuncoipoiuteincometux
ietuinonbelullolullCunudiun
coipoiutemembeis.
Tle lull in piot tuxes is cuused by tle
ongoingunnuulieductionincoipoiute
incometuxiuteswlicluiedesigned
toenlunceCunuduscompetitiveness.
Intleyeui2013,tlemuinstieum
combinedcoipoiuteincometuxiuteis
scleduledtolulluguin.
TuxudministiutoisinCunuduembiuce
teclnology,undlencecoipoiutions
cun muke tleii tux lings online und
puytleiituxesbydiiectbunktiunslei.
TlePuyingTuxesstudyvulidutes
tleelloitsolledeiulundiegionul
tuxpolicyiepiesentutivesund
udministiutoisuciossCunudu.
Cunuduis pioud to be in tle top
peicentileoltleeconomycompuiison
intlestudy.Neveitleless,tuxpolicy
iepiesentutivesundudministiutois
uciosstlecountiyundeistundtlut
impiovingtuxpolicyundcompliunce
iesultsisunevei-endingtusk.
26.9%
131 8
Tuxpolicyincludesuspeciulieduced
coipoiuteincometuxiuteloiuctive
business piot euined witlin Cunudu
byupiivutecompunytlutisownedby
Cunudiuntuxiesidentindividuuls.In
simple teims, tle ist SS00,000 ol tlis
piot is tuxed ut u combined ledeiul
undiegionultuxiutetlutis11%
loweitluntlemuinstieumcombined
coipoiuteincometuxiute.Sligltly
moie tlun lull ol tle piot euined by
tlePuyingTuxescusestudycompuny
issubjecttotlisloweipiivutecompuny
combinedtuxiuteukeyieusonloi
tlelowTotulTuxRuteiesult.Tletuble
summuiisestleTotulTuxRuteoveitle
pusttwoyeuis:
Current year Prior year
Prot taxes 8.4% 9.4%
Payroll taxes 12.7% 12.6%
Property tax 5.1% 6.1%
Other taxes 0.7% 0.7%
Total tax rate 26.9% 28.8%
Thereionolonolyses
Soutl Ameiicu
23
tle Soutl Ameiicu iegion is
S3.S%wliclisligleitluntle
woilduveiugeol44.7%undis
tleliglestolunyiegionupuit
liom Aliicu. Five economies in
tleiegionluveTotulTuxRutes
wlicl exceed60%.
TleuveiugeTotulTuxRute
loitleiegionluslullenby
only3.7%oveitleeiglt
yeuisoltlestudyundintle
mostiecentyeuitleiutelus
incieusedsligltly.
ucioss tle Soutl Ameiicun
Regionis619louis,wliclis
signicuntly liglei tlun tle
woilduveiugeundtleliglest
ol unyiegion.
Tlelouistocomplyluve
iemuinedliglloitleiegion.
Wliletleuveiugeluslullen
by40louis,itlusulwuysbeen
tleliglestundisstill3S2
louis ubove tle woilduveiuge.
Tlenumbeiolpuymentsis
tleoneindicutoitlutlus
lullen signicuntly loi tlis
iegion.Itlusieducedby11.4
wliclisonlysecondtotlelull
iecoided loi Centiul Asiu &
EusteinEuiope.
Tleuveiugenumbeiol
puymentsut24.6istleonly
indicutoiloitlisiegionwlicl
isbelowtlewoilduveiuge,
butlulloltleeconomiesluve
unumbeiubovetlewoild
uveiugeundlullunumbei
belowit.
23
The following economies are included in our analysis of South America: Argentina; Bolivia; Brazil; Chile;
Colombia; Ecuador; Guyana; Paraguay; Peru; Suriname; Uruguay; Venezuela, R.B.
Chile
Countiyuiticle,
puge131
Brozil
Countiyuiticle,
puge129
Ecuodor
Countiyuiticle,
puge13S
Colombio
Countiyuiticle,
puge133
124 7KHUHJLRQDODQDO\VHV6RXWK$PHULFD
The 2013 lobol tox prole
Tle tux piole (see Figuie 2.S1) loi
Soutl Ameiicu is not dissimilui to tle
globul uveiuge piole. Tle peicentuges
uccountedloibycoipoiuteincometux
uiesligltlylessloitleTotulTuxRute,
undloitletimetocomply.Oveiullitis
tleotleituxestlutuctuullyuccount
loitlemujoiityoltletuxbuiden
plucedonbusinessintlisiegion.
TotolToxRote
Soutl Ameiicu iegion is S3.S% wlicl
isligleitluntlewoilduveiugeol
44.7%undistleliglestolunyiegion
upuit liom Aliicu (see Figuie 2.S2).
Five economies in tle iegion luve Totul
TuxRuteswliclexceed60%.Tlese
iutesuieliglloiuvuiietyolieusons
including, u tuinovei tux in Aigentinu
coupledwitlligllubouituxes,ligl
levelsollubouituxesundsociul
contiibutionsinBiuzilundColombiu,
utiunsuctiontuxbusedontuinoveiin
Boliviu,wlileinRepublicuBolivuiiunu
deVenezuelutleieuieligllevelsol
municipulbusinesstuxundemployeis
Figure 2.51: The tax prole for South America
Prot taxes
Labour taxes
Other taxes
50%
37%
47%
22%
31%
36%
32%
32%
13%
Figure 2.52: The Total Tax Rates in South America
Suriname
Chile
Ecuador
Paraguay
Guyana
Peru
Uruguay
Venezuela, R.B.
Brazil
Colombia
Bolivia
Argentina
SouthAmericooveroe(53.5%)
Prot taxes
Labour taxes
Other taxes
27.9 27.9
21.1 3.8 3.2 28.1
17.7 13.7 3.2 34.6
9.6 18.6 6.8 35.0
23.8 8.8 3.5 36.1
26.7 11.0 2.8 40.5
23.6 15.6 2.8 42.0
6.1 18.0 38.6 62.7
24.6 40.8 3.9 69.3
19.2 28.8 26.4 74.4
18.8 64.6 83.4
2.7 29.4 76.2 108.3
Timetocomply
Tleuveiugetimetocomplyuciosstle
Soutl Ameiicun iegion is 619 louis,
wlicl is signicuntly liglei tlun tle
woilduveiugeundtleliglestoluny
iegion.Tlisisluigelydiivenbyloui
economieswleieittukesouicuse
studycompunymoietlun600louis
tocomplywitlitstuxcompliunce(see
Figuie 2.S3). It tukes 2,600 louis in
Biuzil,1,02SlouisinBoliviu,792
louisinRepublicuBolivuiiunude
Venezuelu,und6S4louisinEcuudoi.
InEcuudoi,RepublicuBolivuiiunude
VenezueluundBoliviutleselouisuie
iequiiedmuinlyloicompliuncewitl
sociulcontiibutionsundconsumption
tuxes sucl us VAT. In Biuzil tle time
tocomplyisliglloiulltlieemujoi
cutegoiiesoltux,loicoipoiute
incometux(IRPJ),sociulsecuiity
contiibutions und VAT (ICMS).
Numberofpoyments
Tleuveiugenumbeiolpuyments
ut24.6istleoneindicutoiwliclis
belowtlewoilduveiuge.Tlisuveiuge
lowevei disguises u signicunt
dilleiencebetweensixeconomies
tlut ull luve electionic ling und
puymentlullyimplementedloiullol
tleiimujoituxesundwlicltleieloie
luveleweitlun10puyments,und
sixeconomiestlutluve29oimoie
puyments.WlileBoliviuundUiuguuy,
loi exumple, luve electionic ling und
puymentloitleiicoipoiuteincometux
iegimes,tleydonotluveitloitleii
otleituxesundtleieisnoelectionic
ling und puyment in tle loui otlei
economieswliclcuncleuilybeseenin
Figuie2.S4.
Figure 2.53: The time to comply in South America
Figure 2.54: The number of payments in South America
Suriname
Colombia
Guyana
Chile
Peru
Uruguay
Paraguay
Argentina
Ecuador
Venezuela, R.B.
Bolivia
Brazil (see below)
Brazil (detail)
SouthAmericooveroe(619)
Labour taxes
Consumption taxes
48 24 127 199
50 87 66 203
48 48 167 263
42 125 125 291
39 144 110 293
88 114 108 310
144 96 147 387
105 84 216 405
108 306 240 654
120 288 384 792
110 507 408 1,025
736 490
736 490 1,374 2,600
Chile
Ecuador
Argentina
Brazil
Colombia
Peru
Suriname
Uruguay
Guyana
Paraguay
Bolivia
Venezuela, R.B.
SouthAmericooveroe(24.6)
Prot taxes
Labour taxes
Other taxes
11 4 6
2 1 5 8
11 7 9
2 2 5 9
11 7 9
1 2 6 9
4 12 13 29
1 24 8 33
6 12 17 35
5 12 18 35
1 12 29 42
14 28 29 71
Thetrends
Figuie 2.SS slows tlut tle time to
complyundtleTotulTuxRuteluve
beenslowtolull,wliletlenumbeiol
puyments luve ieduced signicuntly.
TotolToxRote
iegionluslullenbyonly3.7%ovei
tleeigltyeuisoltlestudyundin
tlemostiecentyeuitleiutelus
incieusedsligltly.
TlesmulllullintleTotulTuxRute
loitleiegionoveitleeigltyeui
peiiod2004to2011istleiesultol
someeconomiessuclusUiuguuyund
PuiuguuyieducingtleiiTotulTuxRute
wlileotleisluveeitleiclungedtleii
iuteslittle,oiinsomecusessuclusin
RepublicuBolivuiiunudeVenezuelutle
iutesluvebeenincieused.
Foi Uiuguuy tle Totul Tux Rute lus
lullenliom71.4%inPuyingTuxes
2006to42.0%intlemostiecentstudy
byeliminuting1Stuxes(tlougl,tle
impuctoltlesetuxesvuiied)undby
ieducingtlecoipoiuteincometux
stututoiyiuteliom30%to2S%.
InPuiuguuytleTotulTuxRutelus
ieducedliomS4.3%to3S.0%,tlis
luvingbeendiivenbytleiuteol
coipoiuteincometuxpiogiessively
lullingto10%in2006liom20%in
200Sund30%in2004.
InRepublicuBolivuiiunude
Venezuelutleintioductionoltliee
newtuxes:Science,Teclnology
und Innovution tux, Antidiug tux,
woikplucepieventions,conditionsund
enviionmenttux,incieuseditsTotul
TuxRuteliomS1.1%PuyingTuxes
2006to62.7%inPuyingTuxes2013.
2004 2005 2006 2007 2008 2009 2010 2011
70
60
50
40
30
20
10
0
700
600
500
400
300
200
100
0
Time (Hours) Percentage/Payments
Total Tax Rate
Payments
Time
Figure 2.55: The trends in South America
Timetocomply
Tlelouistocomplyluveiemuined
liglloitleiegion.Wliletleuveiuge
luslullenby40louis,itlusulwuys
beentleliglestolunyolouiiegions
undintlisyeuisstudyisstill3S2
louisubovetlewoilduveiuge.
ReloimsundeitukeninColombiu
ieducingtlelouistocomplyliom4S6
inPuyingTuxes2004to203Puying
Tuxes2011undinPeiuwleietle
louisluveieducedby131,luigely
uccountloitleieductionintleiegion.
InColombiuunintegiutedloimloi
onlinesociulcontiibutionslusbeen
intioducedundtleieisulsonowu
lucility to le und puy coipoiute income
tux und VAT tliougl tle Electionic
InloimutionSeivices.Peiulusulso
impioveditselectionicpuyment
lucilitiesloitletlieemujoituxesund
tleuseolutuxuutloiitywebsiteund
lus intioduced VAT soltwuie wlicl is
widelyusedbybusiness.
Numberofpoyments
Tlenumbeiolpuymentsindicutoi
istleoneindicutoitlutluslullen
signicuntly loi tlis iegion. It lus
ieducedby11.4puymentswliclis
onlysecondtotlelulliecoidedloi
Centiul Asiu & Eustein Euiope. Tle
muineconomiescontiibutingtotlis
lulloveitleeigltyeuipeiiodweie
Colombiu (by 60), Aigentinu (by S3),
undUiuguuy(by24).Tleselullsuiise
muinly in view ol simplicutions mude
totletuxsystemundtleintioduction
ol electionic ling undpuyment.
Carlos Iacia
PwC Brazil
Brozil
A new system piomises to ieduce tle compliunce buiden
loibusiness
Biuzilisconsideiedtobeoneolu
smullnumbeioleconomiesuioundtle
woildwlicllusenoimouspotentiulto
giowunduttiuctinvestment.Butlike
munyotleieconomiesitislucingsome
economicobstucleswliclluvebeen
cuusedbytleglobuleconomicciisis.
Inudditionitiscleuitluttlecountiy
stilllusulongwuytogointeimsol
ieloimingtlelegul,iegulutoiyund
tuxsystemstopiovideunenviionment
tlutcunlelpunlocktleeconomic
potentiultlutexists.
Fiom u tux peispective, tleie is mucl
stilltobedone-undtlisisillustiuted
veiywellbytleiesultspiesentedby
tleindicutoisintlePuyingTuxes
study.Tletuxcompliuncebuiden
loiBiuzilisliglundcontinuestolui
exceedtletimeiequiiedinunyotlei
economybysomemuigin.Ittukestle
cusestudycompunysome2,600louis
oi6Sweeks(busedonu40louiweek)
tocomplywitlitstuxulluiisundtlis
lus been u constunt Figuie tliouglout
tleeigltyeuisoltlePuyingTuxes
study.Tletuxsystemcompiisesmuny
conlusingluwsundiuleswliclluve
beenimplementedbytleledeiul,stute
undmunicipultuxuutloiities.Tle
Biuziliun stute VAT (ICMS) system is
puiticuluilycomplex.Itisustutetux
tlutiequiiesliequentinloimution
exclungeunddivisionoltletux
ievenuesumongtle26stutes,tle
Fedeiul Distiict und its municipulities.
Tlisscenuiioiesultsintuxpuyeis
spendinguluigeumountoltimejust
tiyingtokeepup-to-dutewitltle
systeminoideitobeubletopeiloim
tlenecessuiyculculutions,collecttle
tuxes, ll-out uncilluiy obligutions, und
tosendtlesetotletuxuutloiities.
TlePuyingTuxesiesultsluvebeen
uieguluileutuiewlicllusbeen
commentedonbytleBiuziliunmediu
undtleieisiecognitionliomtle
Biuziliuntuxuutloiitiesoltleneedloi
tlesystemtoclunge.
Tle ist steps luve ulieudy been tuken
bytlegoveinment.Tlislusincluded
tleintioductionoltleSPED(Sistema
Pblico de Escriturao Digital-Public
SystemolDigitulBookkeeping).
SPEDpiomisestobiingmuny
impiovements.Tlebelielistlutitwill
upgiudeundmodeinisetlecomplex
Biuziliuntuxsystemund,inuddition,
ituimstoestublislunewkindol
ielutionslipbetweentuxpuyeisund
tlegoveinmenttuxudministiution.
Tlisielutionslipwillbebusedon
tiunspuiency,inoideitoullow
costieduction,iutionulisutionund
simplicution ol uncilluiy obligutions.
Tletuxuutloiitiesuiestiongly
committedtomukingtlenewsystem
mundutoiyloiullcompunies,butonly
tleluigecompuniesutpiesentluve
implementedit.
WitltleimplementutionolSPED,
tlelopeistlutintleneuilutuie,
tletimespentbytuxpuyeistocomply
witltleiituxobligutionswilllull.
SPEDslouldenublemucloltletux
systemundielutedpioceduiestobe
contiolleduutomuticully.Tlisslould
eliminutemucloltlepupeiwoikund
ieducetletimeiequiiedtocomply
witllegislutionclunges,uswellus
tlecleckingunduuditingoltux
inloimution. At piesent, lowevei,
tleoldsystemscontinuetobeused
inpuiullelsotluttuxpuyeisluveto
invest signicunt umounts ol time in
implementingtlesystemloiSPED,but
tleyulsostillneedtocomplywitltle
olduncilluiyobligutions.
Altlougl muny tux obligutions und
pioceduiesuienowelectionicloi
tuxpuyeis,otleisuiestillintiunsition.
Accoidingly, we uie still wuiting
loi,undlookingloiwuidto,tle
positiveiesultstlutcunbeexpected
liomSPED.
69.3%
2,600
9
Chile
Tux iute incieuse to nunce public expendituies wlile compliunce
costsuiestilluclullenge
Francisco Selame
PwC Chile
TlePuyingTuxesindicutoisloiClile
luveclungedlittleoveitleeiglt
yeui peiiod ol tle study ieecting tle
stubilityoltleClileuntuxsystem,
witl no signicunt clunges in tle
tuxcostoitlecompliuncebuiden.In
tletwomostiecentiepoits(Puying
Tuxes2011und2012),tleTotulTux
Rutelusiemuinedut2S%,tletimeto
comply316louisundtlenumbeiol
tuxpuymentslusbeen9.Howeveiin
tlisyeuisstudy,eucloltleindicutois
lusclunged.
TleTotulTuxRuteindicutoiincieused
liom 2S% to 28.1%, ieecting un
incieuse in tle Fiist Cutegoiy Tux
iuteloiincomeduiing2011,liom
17%to20%.Tliswusintioducedby
LuwNo.20,4SS.Undeitlisluwitlud
been intended tlut tle ist cutegoiy
tuxiutewouldlulluguinto18.S%in
2012undtlenbucktouiuteol17%in
2013.HoweveionSeptembei4,2012
tleClileunCongiessuppiovedutux
ieloim(LuwN20,630,publisledin
tle Olciul Guzette on Septembei 27,
2012) tlut will keep tle ist cutegoiy
tuxiuteut20%usupeimunentiute
liom2012onwuids.Tlisieloimis
specicully uimed ut incieusing public
ievenues to piovide udditionul nunce
loipubliceducution.Otleimutteis
tlutluvebeenincludedintleiecent
tuxieloimsincludetleieductionol
stumptuxiutesliom1Junuuiy2013;
ieductionsintletuxiutesupplicuble
toloweibiucketsloitleGlobul
ComplementuiyTux(leviesoniesident
individuuls)undsecondcutegoiy
tux(leviesoniesidentemployees);
newtiunsleipiicingpiovisionsto
uligntleClileuntuxsystemwitl
OECDstunduids;undutuxcieditulso
intioducedloieducution.
Foi tle lutuie, it is expected tlut
tleTotulTuxRuteindicutoiwillnot
clunge witl tle ist cutegoiy tux
iutestuyingutpiesentlevels,undtle
stumptuxiuteieductionnotexpected
toluveumuteiiulimpuctontleiesult
busedontleluctputteinoltlecuse
studycompuny.
Tletimetocomplyloitlecusestudy
compunyluslullenliom316to291
louis.Tlisieductioniecognisestlut
Foim 29 cun be used loi ling und
puying VAT jointly witl luboui tuxes
tliougl tle electionic ling system.
TlecompliuncebuideninClile
loweveiiemuinsielutivelyligl(ubove
tleglobuluveiugeol267)undtle
luunclolPuyingTuxes2013loiSoutl
Ameiicu in Clile will piovide u good
oppoitunity loi tlis to bediscussed.
Finully, tle tux puyments indicutoi
lusiemuinedielutivelystuble,
umountingto6tuxpuymentspeiyeui.
Tlisiecognisestlutsociulsecuiity
contiibutionscunbepuidjointlyusing
upiivuteseiveiculledPieviied,
wliclisuvuilubleloituxpuyeiswitl
usimiluiluctputteintotlecuse
studycompuny.
Tle Soutl Ameiicun luuncl event in
Novembei2012willbeuninteiesting
oppoitunitytodiscusstleseclunges,
tleimpuctoltleiecenttuxieloim
undtleclullengestlutClilelusto
conliontwitluviewtoimpiovingits
indicutoisinlutuie.
28.1%
291
6
Muny signicunt events luve occuiied
sincetlePuyingTuxesiepoitwus
luuncledinColombiulustyeui,
tlemostimpoituntolwliclistle
intioductiontoCongiessolului-
ieuclingtuxbill.
Tlebill,ilenucted,willimpiove
signicuntly tle tux tieutment loi
loieigninvestoisintlesecuiities
muikets,uswellusudoptingunew
incometuxtuiilliungeloiemployees
undotleiindividuuls.Tlepioposed
iegulutionisintendedtoieduce
puyioll costs signicuntly, witl u view
toboostingloimulemployment.Tle
coipoiuteincometuxiutewouldulso
beieducedloisomecoipoiutetux
puyeis(muinlysmullundmedium
enteipiises).Itisulsointendedtlut
vuiiousotleiissueswillbeuddiessed
includingtiunsleipiicingiegulutions
und tle VAT iegime.
Tletuxuutloiitiescontinuetobe
veiyuctiveinnegotiutingnewtieuties
toensuietleuvoidunceoldouble
tuxution, wlicl will benet tuxpuyeis.
A numbei ol new tieuties luve been
ugieed,includingtieutieswitlCunudu
undSwitzeilund.
ItisintendedtluttleInteinutionul
Finunciul Repoiting Stunduids (IFRS)
willbecomemundutoiyinstuges
between2013und201S.Tliswill
contiibutetoensuiingtlutbettei
quulity nunciul inloimution is
pioducedbyenteipiisesinullsectois
oltleeconomy.
Colombio
TleColombiuntuxsystemcontinuestoevolveustleeconomy
guinsmomentum
Mauricio Carvajal Crdoba
PwC Colombia
Wliletlecompliuncebuidenlus
ieducedsteudilyoveitleyeuisol
tlePuyingTuxesstudywitltle
intioduction ol online ling und
puyment,mostiecentlytlebuiden
lusincieusedulittle(bytenlouis)
usuiesultoltleintioductionolnew
loimswliclluvetobesubmitted
jointlywitltleincometuxietuinliom
2012onwuids.Tlisnewiequiiement
lusincieusedtletuxbuidenloimost
tuxpuyeisin2012undwillcontinuein
tlelutuie.
Altlougl pupeiwoik lus geneiully
beenieducedinColombiu,some
pioceduiulmutteisstilliequiie
substuntiulinteiuctionbetween
businessesundtletuxugencies,
includinginpuiticuluiwlen
ieimbuisement ol VAT ciedits is
iequiied.Intlelutuieitislopedtlut
tuxieloimswillpiovidesomesolutions
intlisieguid.
Tle nunciul tiunsuction tux (oi debit
tux),ultlouglstillinpluce,willbe
plusedoutpiogiessivelyliom2013
to2018,wlentleiutewillieduceto
0%.Tletuxcontinuestouttiuctstiong
ciiticismusitdiscouiugestleuseol
tle nunciul system in tle economy.
Itseliminutionwilllelpieduce
tleTotulTuxRute,wliclisligl,
wlileulsoimpiovingtlenumbeiol
puymentsindicutoi.
SowliletleColombiuntuxsystem
lusevolvedunddevelopediniecent
yeuistleieisstillioomloiluitlei
ieloimwitlulocusonimpiovingtle
inteiuctionbetweentletuxuutloiity
undtuxpuyeis,undsimplilyingtletux
stiuctuiebyeliminutingceituintuxes.
74.4%
203 9
Ecuudoilusintioducedunumbei
olclungestoitstuxlegislutionund
iegulutionsduiingtlepeiiodcoveied
bytlePuyingTuxesstudy.Mujoi
clunges weie ist enucted in 2008,
undunumbeiolluitleiieloims
luvebeenimplementedsincetlen.
Howevei,tleseclungesluveonly
sligltlyieducedtleTotulTuxRute,und
tleielusbeennoimpiovementyetin
tletimetocomply.
Clungesmudetotletuxiutesluve
botlincieusedundieducedtleTotul
Tux Rute loi Ecuudoi. Additionul tuxes
intioducedin2008incieusedtleiute
wlileieloimssuclustlegiuduul
unnuulieductionintleincometuxiute
(liom2S%upplicublein2010,to22%
wliclwillbeellectiveliom2013)luve
undwillcontinuetoieducetleiute.
Tlegoveinmentlusulsoimplemented
uPioductionCodeLuwwlicl
intioducedotleiincentives,sucl
usincometuxexemptionsloinew
investments in specic economic uieus.
Howevei,despitetleexpectutiontlut
sucluninitiutivewouldluveupositive
impuctoninvestmentinEcuudoitlis
lusnotyetmuteiiulised.
Despitetleuvuilubilityolelectionic
ling und puyment wlicl gives u low
puymentindicutoiiesulttletimeto
complyiemuinsliglinviewoltle
iequiiement to piovide signicunt
suppoitinginloimution.
Ecuodor
Newclullengeslieuleudusgoveinmentseeks
udditionulievenues
Pablo Aguirre
PwC Ecuador
At piesent tleie uie seveiul key tux
issuestlutuiebeingdiscussedin
tlecountiy.
As is tle cuse in muny economies,
tlegoveinmentislookingtoiuise
udditionulievenuebymeunsol
indiiecttuxution,iecognising
tlepotentiulloiieduced
udministiutionundimpiovingtle
euseolcollectionbyusingtlistype
oltux.
Tleieisulsoudebuteuiound
incometuxpie-puymentswlicl
uiebusedonupeicentugeolussets,
equity,incomeundexpenses
liomtlepieviousyeuiloitle
culculution. A mujoi concein is
tluttletuxpie-puymentswill
ellectivelybecomeuminimumtux
puidloituxpuyeis(iltleiiincome
tuxobligutionisuctuullylowei
tlunpuymentsmudeinudvunceoi
wleielossesuctuullymuteiiulise
loitleyeui).Someindustiy
sectoisluveexpiessedconceins
ieguidingtleimpuctoltlese
incometuxpiepuymentsontleii
economicuctivities.
Tleintioductionoltle
Inteinutionul Finunciul Repoiting
Stunduids (IFRS) us tle uccounting
piinciplestobeusedinEcuudoi,
lusgeneiutedunceituintyund
conceinieguidingtleimpuct
tluttleupplicutionoltlesenew
stunduidswillluveloideteimining
tuxubleincome.
Ontletuxtiunspuiencyugenduin
2011tleEcuudoiiuntuxuutloiity
iuledtlutcompunieswillluveto
iepoittlenumesoltleiiultimute
beneciuiies und owneis, except loi
compunieswlicluielistedontle
loculstockexclunge.Tlisstepisun
innovutive one loi Lutin-Ameiicu,
ullowingtuxuutloiitiestoieceive
dutuidentilyingwlotleellective
owneisuieolcompuniesopeiuting
in tlecountiy.
Globully,tuxesuiecleuilyun
instiumentolgoveinmenteconomic
policy,unimpoitunttooltolelpdeul
witltlecuiienteconomicissues.Tle
positionisnodilleientinEcuudoi.
goveinmentislookingtousseititsiiglt
tolevytuxesonievenuesuttiibutuble
totleiijuiisdictionunduspuitol
tlisugendutleyuielookingutwuys
tosecuiemoieinloimution,und
contiol,inoideitolelptlemdotlis.
Tuxpuyeisneedtobeuwuieoltle
potentiulloiclungeundtobepiepuied
touddiesstlesenewclullenges.
34.6%
654
8
Appendix 1
Methodoloyond
exomplecolculotions
foreochPoyinToxes
sub-indicotor
138 $SSHQGL[0HWKRGRORJ\
PuyingTuxesiecoidstletuxesund
mundutoiycontiibutionstlutu
medium-sizecompunymustpuyinu
givenyeuiuswellusmeusuiingtle
udministiutivebuidenolPuyingTuxes
undcontiibutions.Tlepiojectwus
developedundimplementeduspuitol
tleDoing BusinesspiojectbytleWoild
Bunk und IFC in coopeiution witl PwC.
Tuxesundcontiibutionsmeusuied
include tle piot oi coipoiute income
tux,sociulcontiibutionsundluboui
tuxespuidbytleemployei,piopeity
tuxes,piopeitytiunsleituxes,dividend
tux, cupitul guins tux, nunciul
tiunsuctionstux,wustecollection
tuxes,velicleundioudtuxes,unduny
otleismulltuxesoilees.
PuyingTuxesmeusuiesulltuxesund
contiibutionstlutuiegoveinment
munduted(utunylevelledeiul,
stuteoilocul)undtlutupplytotle
stunduidisedbusinessundluveun
impuct in its nunciul stutements. In
doingso,PuyingTuxesgoesbeyond
tle tiuditionul denition ol u tux. As
dened loi tle puiposes ol goveinment
nutionuluccounts,tuxesincludeonly
compulsoiy,uniequitedpuymentsto
geneiulgoveinment.PuyingTuxes
depuits liom tlis denition becuuse it
meusuiesimposedcluigestlutullect
businessuccounts,notgoveinment
uccounts,tlemuindilleienceielutes
tolubouicontiibutions.TlePuying
Tuxesmeusuieincludesgoveinment-
mundutedcontiibutionspuidbytle
employeitouiequitedpiivutepension
lundoiwoikeisinsuiuncelund.
Tleindicutoiincludes,loiexumple,
Austiulius compulsoiy supeiunnuution
guuiunteeundwoikeiscompensution
insuiunce. Foi tle puipose ol
culculuting tle Totul Tux Rute (dened
below),onlytuxesboineuieincluded.
Foi exumple, vulue udded tuxes uie
geneiullyexcluded(piovidedtleyuie
notiiiecoveiuble)becuusetleydo
not ullect tle uccounting piots ol tle
businesstlut is, tley uie not ieected
intleincomestutement.
Tleyuie,lowevei,includedloitle
puiposeoltlecompliuncemeusuies
(timeundpuyments),ustleyuddto
tlebuidenolcomplyingwitltle
tuxsystem.
TlePuyingTuxesstudyusestle
Doing Businesscusestudyscenuiioto
meusuietletuxesundcontiibutions
puidbyustunduidisedbusiness
undtlecomplexityoluneconomys
tuxcompliuncesystem.Tliscuse
study scenuiio uses u set ol nunciul
stutementsundussumptionsubout
tiunsuctionsmudeoveitlecouiseol
tleyeui.Ineucleconomytuxexpeits
liom u numbei ol dilleient ims
(includingPwC)computetletuxesund
mundutoiycontiibutionsdueintleii
juiisdictionbusedontlestunduidised
cusestudylucts.Inloimutionisulso
compiled on tle liequency ol ling
undpuyments,uswellustimetukento
complywitltuxluwsinuneconomy.
Tomuketledutucompuiubleucioss
economies,seveiulussumptions
ubouttlebusinessundtletuxesund
contiibutions uieused.
Tle Woild Bunk und IFC oveiull
iunkingloitleeuseolPuyingTuxes
istlesimpleuveiugeoltlepeicentile
iunkingsloieucloltlesubindicutois,
buttlisyeuiwitlutliesloldbeing
uppliedtotleTotulTuxRute.Tle
tlieslold is dened us tle liglest
TotulTuxRuteumongtletop1S%ol
economiesintleiunkingontleTotul
TuxRute.Itisculculutedundudjusted
onuyeuilybusis.Tlisyeuistlieslold
is 2S.7%. All economies witl u Totul
TuxRutebelowtlistliesloldieceive
tlesumescoieustleeconomyuttle
tlieslold.Tletliesloldisnotbused
onunyeconomictleoiyolunoptimul
tuxiutetlutminimisesdistoitions
oi muximises elciency in tle tux
systemoluneconomyoveiull.Insteud,
itismuinlyempiiiculinnutuie,set
uttleloweiendoltledistiibution
oltuxiutesleviedonmedium-size
enteipiisesintlemunuluctuiing
sectoiusobseivedtliougltlePuying
Tuxesindicutois.Tlisieducestlebius
intleindicutoistowuideconomies
tlut do not need to levy signicunt
tuxesoncompuniesliketleDoing
Businessstunduidisedcusestudy
compunybecuusetleyiuisepublic
ievenueinotleiwuysloiexumple,
tliougltuxesonloieigncompunies,
tliougltuxesonsectoisotleitlun
munuluctuiingoiliomnutuiul
iesouices(ullolwlicluieoutsidetle
scopeoltlemetlodology).
Assumptionsoboutthebusiness
Tlebusiness:
Isulimitedliubility,tuxuble
compuny.Iltleieismoietlunone
typeollimitedliubilitycompuny
intleeconomy,tlelimited
liubilityloimmostcommonumong
domestic ims is closen. Tle
mostcommonloimisiepoited
byincoipoiutionluwyeisoitle
stutisticul olce.
Stuitedopeiutionson1Junuuiy
2010. At tlut time tle compuny
puiclusedulltleussetsslown
initsbuluncesleetundliiedull
itswoikeis.
Opeiutesintleeconomysluigest
businesscity.
Is100%domesticullyownedund
lus ve owneis, ull ol wlom uie
nutuiulpeisons.
At tle end ol 2010, lus u stuit-
upcupitulol102timesincome
peicupitu.
Peiloimsgeneiulindustiiuloi
commeiciul uctivities. Specicully,
it pioduces ceiumic oweipots
undsellstlemutietuil.Itdoesnot
puiticiputeinloieigntiude(no
impoitoiexpoit)unddoesnot
lundlepioductssubjecttouspeciul
tuxiegime,loiexumple,liquoioi
tobucco.
At tle beginning ol 2011, owns
twoplotsollund,onebuilding,
muclineiy, olce equipment,
computeisundonetiuckundleuses
onetiuck.
Doesnotquulilyloiinvestment
incentives oi uny benets upuit
liomtloseielutedtotleugeoisize
oltlecompuny.
Hus60employeeslouimunugeis,
eiglt ussistunts und 48 woikeis. All
uienutionuls,undonemunugeiis
ulsounownei.Tlecompunypuys
loiudditionulmediculinsuiunce
loiemployees(notmundutedby
uny luw) us un udditionul benet.
Inuddition,insomeeconomies
ieimbuisublebusinesstiuvelund
cliententeituinmentexpensesuie
consideied liinge benets. Wlen
upplicuble,itisussumedtluttle
compuny puys tle liinge benet tux
on tlis expense oi tlut tle benet
becomestuxubleincomeloitle
employee.Tlecusestudyussumes
noudditionulsuluiyudditionsloi
meuls,tiunspoitution,educution
oiotleis.Tleieloie,evenwlen
sucl benets uie liequent, tley
uienotuddedtooiiemovedliom
tletuxublegiosssuluiiestouiiive
uttlelubouituxoicontiibution
culculution.
Husutuinoveiol1,0S0times
incomepeicupitu.
Mukes u loss in tle ist yeui ol
opeiution.
Husugiossmuigin(pietux)ol20%
(tlutis,sulesuie120%oltlecost
olgoodssold).
Distiibutes S0% ol its net piots us
dividendstotleowneisuttleend
oltlesecondyeui.
Sellsoneolitsplotsollundut
u piot ut tle beginning ol tle
secondyeui.
Husunnuulluelcostsloiitstiucks
equultotwiceincomepeicupitu.
Issubjecttouseiiesoldetuiled
ussumptionsonexpensesund
tiunsuctionstoluitleistunduidise
tle cuse. All nunciul stutement
vuiiublesuiepiopoitionulto200S
income pei cupitu. Foi exumple,
tleowneiwloisulsoumunugei
spends10%olincomepeicupitu
ontiuvellingloitlecompuny
(20%oltlisowneisexpenses
uiepuielypiivute,20%uieloi
enteituiningcustomeisund60%loi
businesstiuvel).
Assumptionsoboutthetoxesond
contributions
All tle tuxes und contiibutions
iecoideduietlosepuidintle
secondyeuiolopeiution(culendui
yeui 2011). A tux oi contiibution
isconsideieddistinctilitlusu
dilleientnumeoiiscollected
byudilleientugency.Tuxesund
contiibutionswitltlesumenume
undugency,butcluigedutdilleient
iutesdependingontlebusiness,
uiecountedustlesumetuxoi
contiibution.
Tlenumbeioltimestlecompuny
puystuxesundcontiibutionsin
uyeuiistlenumbeioldilleient
tuxesoicontiibutionsmultiplied
bytleliequencyolpuyment(oi
witllolding)loieucltux.Tle
liequencyolpuymentincludes
udvuncepuyments(oiwitllolding)
uswellusieguluipuyments(oi
witllolding).
ThePoyinToxesindicotors
Toxpoyments
Tle tux puyments indicutoi ieects tle
totulnumbeioltuxesundcontiibutions
puid,tlemetlodolpuyment,tle
liequencyolpuyment,tleliequency
ol ling und tle numbei ol ugencies
involvedloitlisstunduidisedcuse
studycompunyduiingtlesecondyeui
olopeiution.Itincludestuxeswitlleld
bytlecompuny,suclussulestux,vulue
uddedtuxundemployee-boineluboui
tuxes.Tlesetuxesuietiuditionully
collectedbytlecompunyliomtle
consumeioiemployeeonbelullol
tle tux ugencies. Altlougl tley do
notullecttleincomestutements
oltlecompuny,tleyuddtotle
udministiutivebuidenolcomplying
witltletuxsystemundsouieincluded
in tle tux puymentsmeusuie.
Tlenumbeiolpuymentstukesinto
uccount electionic ling. Wleie
lull electionic ling und puyment is
ullowedunditisusedbytlemujoiity
olmedium-sizebusinesses,tletux
iscounteduspuidonceuyeuieven
il lings und puyments uie moie
liequent. Foi puyments mude tliougl
tliidpuities,suclustuxoninteiest
puid by u nunciul institution oi luel
tuxpuidbyulueldistiibutoi,onlyone
puymentisincludedevenilpuyments
uiemoieliequent.

Turkey: Number of payments
Tax type
World Bank
indicator
Actual
payments Notes
Corporate income tax 1 5 Online ling
Stamp duty on property sale 1 1
Transaction tax on cheques 1 1
Property tax 2 2
Environment tax 2 2
Property transfer fee 1 1
Value added tax (VAT) 1 12 Online ling
Advertising tax 2 2
Vehicle tax 1 1
Stamp duty on contracts 1 1
Employer paid - Social security
contributions
1 12 Online ling
Employer paid Unemployment
insurance contributions
0 12 Paid jointly
Fuel tax 1 1 Embedded in payments
to third parties
Employee paid - Social security
contributions
0 12 Paid jointly
Employee paid Payroll tax 0 12 Paid jointly
Employee paid - Unemployment
insurance contributions
0 12 Paid jointly
Total 15 89
Time
Timeisiecoidedinlouispeiyeui.
Tleindicutoimeusuiestletimetuken
to piepuie, le und puy tliee mujoi
typesoltuxesundcontiibutions:tle
coipoiuteincometux,vulueuddedoi
sulestux,undlubouituxes,including
puyiolltuxesundsociulcontiibutions.
Piepuiutiontimeincludestletime
tocollectullinloimutionnecessuiy
tocomputetletuxpuyubleundto
culculutetleumountpuyuble.Il
sepuiuteuccountingbooksmustbe
keptloituxpuiposes-oisepuiute
culculutionsmude-tletimeussociuted
witltlesepiocessesisincluded.
Tlisextiutimeisincludedonlyil
tleieguluiuccountingwoikisnot
enougl to lull tle tux uccounting
iequiiements. Filing time includes
tletimetocompleteullnecessuiy
tux ietuin loims und le tle ielevunt
ietuinsuttletuxuutloiity.Puyment
timeconsideistlelouisneededto
muketlepuymentonlineoiuttle
tuxuutloiities.Wleietuxesund
contiibutionsuiepuidinpeison,tle
timeincludesdeluyswlilewuiting.
Panama: Time to comply
Corporate
income tax
Labour
taxes
Consumption
tax Total
Compliance process
Preparation
Data gathering from internal sources
(for example accounting records) if held
36 24 48
Additional analysis of accounting
information to highlight tax
sensitive items
16 24 56
Actual calculation of tax liability
including data inputting into software/
spreadsheets or hard copy records
24 36 24
Time spent maintaining/updating
accounting systems for changes in
tax rates and rules
0 12 2
Preparation and maintenance of
mandatory tax records if required
0 0 12
Total 76 96 142 314
Filing
Completion of tax return forms 6 24 12
Time spent submitting forms to tax
authority, which may include time for
electronic ling, waiting time at tax
authority ofce etc
1 12 12
Total 7 36 24 67
Payment
Calculations of tax payments required
including if necessary extraction of data
from accounting records
0 0 0
Analysis of forecast data and
ssociated calculations if advance
payments are required
1 12 12
Time to make the necessary tax
payments, either online or at the tax
authority ofce (include time for waiting
in line and travel if necessary)
1 12 12
Total 2 24 24 50
Grand Total 85 156 190 431
TotolToxRote
TleTotulTuxRutemeusuiestle
umountoltuxesundmundutoiy
contiibutionsboinebytlebusinessin
tlesecondyeuiolopeiution,expiessed
us u sluie ol commeiciul piot. Puying
Tuxes2013iepoitstleTotulTuxRute
loiculenduiyeui2011.Tletotul
umountoltuxesboineistlesumolull
tledilleienttuxesundcontiibutions
puyubleulteiuccountingloiullowuble
deductionsundexemptions.Tletuxes
witlleld(sucluspeisonulincome
tux)oicollectedbytlecompunyund
iemittedtotletuxuutloiities(sucl
usvulueuddedtux,sulestuxoigoods
undseivicetux)butnotboinebytle
compunyuieexcluded.
Tletuxesincludedcunbedivided
into ve cutegoiies: piot oi coipoiute
incometux,sociulcontiibutionsund
lubouituxespuidbytleemployei
(iniespectolwliclullmundutoiy
contiibutionsuieincluded,even
ilpuidtoupiivuteentitysuclusu
iequitedpensionlund),piopeitytuxes,
tuinoveituxesundotleituxes(sucl
usmunicipulleesundvelicleund
lueltuxes).
TleTotulTuxRuteisdesignedto
piovideucompielensivemeusuie
oltlecostolulltletuxesubusiness
beuis.Itdilleisliomtlestututoiy
tuxiute,wliclmeielypiovidestle
luctoitobeuppliedtotletuxbuse.
IncomputingtleTotulTuxRute,
tleuctuultuxpuyubleisdividedby
commeiciul piot.
Commeiciul piot is essentiully net
piot beloie ull tuxes boine. It dilleis
liom tle conventionul piot beloie
tux, iepoited in nunciul stutements.
In computing piot beloie tux, muny
ol tle tuxes boine by u im uie
deductible.Incomputingcommeiciul
piot, tlese tuxes uie not deductible.
Commeiciul piot tleieloie piesents
u cleui pictuie ol tle uctuul piot ol u
businessbeloieunyoltletuxesitbeuis
in tle couise ol tle scul yeui.
Commeiciul piot is computed us
sulesminuscostolgoodssold,minus
giosssuluiies,minusudministiutive
expenses,minusotleiexpenses,
minuspiovisions,pluscupitulguins
(liomtlepiopeitysule)minusinteiest
expense,plusinteiestincomeund
minuscommeiciuldepieciution.To
computetlecommeiciuldepieciution,
ustiuiglt-linedepieciutionmetlod
isupplied,witltlelollowingiutes:
0%loitlelund,S%loitlebuilding,
10%loitlemuclineiy,33%loi
tle computeis, 20% loi tle olce
equipment,20%loitletiuckund10%
loibusinessdevelopmentexpenses.
Commeiciul piot umounts to S9.4
timesincomepeicupitu.
Tlemetlodologyloiculculutingtle
TotulTuxRuteisbioudlyconsistent
witltleTotulTuxContiibution
liumewoikdevelopedbyPwCund
tleculculutionwitlintlisliumewoik
loituxesboine.Butwliletlewoik
undeitukenbyPwCisusuullybused
ondutuieceivedliomtleluigest
compuniesintleeconomy,Doing
Businesslocusesonucusestudyloiu
stunduidisedmedium-sizecompuny.
The Total Tax Rate calculation for Chile
CLP 000 CLP 000
Prot before tax (PBT) 198,749
Addback above the line taxes borne:
Unemployment insurance 5,844
Work accident insurance 2,313
Property taxes 3,800
Municipal taxes 1,799
Fuel tax 1,152
Vehicle tax 95
15,003
Prot before all taxes borne/commercial prot 213,752
Corporate income tax on PBT after necessary adjustments (45,131)
Above the line taxes borne (15,003)
Total taxes borne (60,134)
Prot after tax 153,618
Total Tax Rate = Total taxes borne/commercial prot 28.1%
WorldBonkondIFCsdistonce
tofrontiermeosure
Tleeuseolpuyingtuxesiunking
meusuiestlepeiloimunceol
economiesontlepuyments,timeund
TotulTuxRuteindicutoisielutiveto
tlepeiloimunceolotleis.Itdoesnot
piovideinloimutionontleubsolute
impiovementoveitime.Noidoesit
piovideinloimutiononlowluigetle
gupsuiebetweeneconomiesutusingle
pointintime.
Tledistuncetoliontieimeusuieis
designedtouddiesstleseissues,
complementingtleeuseolpuying
tuxesiunking.Tlismeusuieillustiutes
tledistunceoluneconomytotle
liontiei,undtleclungeintle
meusuieoveitimeslowstleextent
towlicltleeconomylusclosedtlis
gup.Tleliontieiisuscoiedeiived
liom tle most elcient piuctice oi
liglestscoieuclievedoneucloltle
componentindicutois(puyments,time
undTotulTuxRute)byunyeconomy
since 2004. Foi exumple, in tlis time
peiiodtlelowestnumbeiolpuyments
iecoidedis3,uclievedbyHongKong
SAR, Clinu, Muldives, Qutui und Suudi
Aiubiu. On time, listoiicully tle lowest
numbeiollouisiecoidedisloitle
Muldiveswlicluntil2011iecoided
0louisbecuuseitdidnotlevyuny
piot, consumption oi luboui tuxes
onwlicltletimeindicutoiisbused.
Foi tle Totul Tux Rute, consistent witl
tleculculutionoltleiunkings,tle
liontiei is dened us tle Totul Tux Rute
coiiespondingtotle1Stlpeicentile
busedontleoveiulldistiibutionol
TotulTuxRutesloiullyeuis(equivulent
to 27.S% ol piots). Il un economy lus
uTotulTuxRutebelowtlislevel,it
isconsideiedtobeuttleliontieiloi
tliscomponent.
Culculutingtledistuncetoliontiei
loieucleconomyinvolvestwomuin
steps. Fiist, individuul indicutoi
scoiesuienoimulisedtoucommon
unit:exceptloitleTotulTuxRute,
tleotleitwocomponentindicutois
y is iesculed to (mux y)/ (mux
min),witltleminimumvulue(min)
iepiesentingtleliontieitleliglest
peiloimunceontlutindicutoiucioss
ulleconomiessince200S.Second,loi
eucleconomytlescoiesobtuineduie
uggiegutedtliouglsimpleuveiuging
intoonedistuncetoliontieiscoie.
An economys distunce to liontiei loi
puyingtuxesisindicutedonuscule
liom0to100,wleie0iepiesents
tlelowestpeiloimunceund100
tleliontiei.
Tledilleiencebetweenuneconomys
distuncetoliontieiscoiein2004und
itsscoiein2011illustiutestleextent
towlicltleeconomylusclosedtle
gup to tle liontiei ovei time. And in
unygivenyeuitlescoiemeusuieslow
luiuneconomyisliomtleliglest
peiloimunceuttluttime.
Tlemuximum(mux)undminimum
(min)obseivedvuluesuiecomputed
loitle174economiesincludedintle
Doing Businesssumplesince2004und
loiullyeuis(liom2004to2011).Tle
yeui2004wusclosenustlebuseline
loitleeconomysumplebecuuseit
wus tle ist yeui tlut Puying Tuxes
indicutoisweieuvuiluble.Tomitigute
tleellectsolextiemeoutlieisintle
distiibutionsoltleiesculeddutu(veiy
leweconomiesneed2,600louisto
complywitltuxobligutions,butmuny
need200louis),tlemuximum(mux)
is dened us tle 9Stl peicentile ol
tlepooleddutuloiulleconomiesund
ullyeuisloieuclindicutoi.Tuketle
CzeclRepublic,wlicllususcoieol
6Sontledistuncetoliontieimeusuie
loi2011.Tlisscoieindicutestlut
tleeconomyis3Speicentugepoints
uwuyliomtleliontieiconstiucted
liomtleliglestpeiloimuncesucioss
ulleconomiesundullyeuis.Czecl
Republicwusluitleiliomtleliontiei
in2004,witluscoieol41.Tle
dilleiencebetweentlescoiesslowsun
impiovementoveitime.
Tledistuncetoliontieiscoiesloieucl
economyundeuclyeuiisuvuilubleon
tleDoing Business website
(lttp://www.doingbusiness.oig/
dutu/distunce-to-liontiei).
Appendix 2
145 Paying Taxes 2012. The global picture
Tuble1:OveiullPuyingTuxesiunking
Tuble2:Tuxpuyments
Tuble3:Timetocomply
Tuble4:TotulTuxRute
Thedototobles
146 $SSHQGL[7KHGDWDWDEOHV
Table 1: Rankings
Economy Overall Rank
Afghanistan 94
Albania 160
Algeria 170
Angola 154
Antigua and Barbuda 142
Argentina 149
Armenia 108
Australia 48
Austria 77
Azerbaijan 76
Bahamas, The 51
Bahrain 7
Bangladesh 97
Barbados 121
Belarus 129
Belgium 75
Belize 45
Benin 173
Bhutan 71
Bolivia 180
Bosnia and Herzegovina 128
Botswana 39
Brazil 156
Brunei Darussalam 22
Bulgaria 91
Burkina Faso 157
Burundi 137
Cambodia 66
Cameroon 176
Canada 8
Cape Verde 102
Central African Republic 181
Chad 184
Chile 36
China 122
Colombia 99
Comoros 114
Congo, Dem. Rep. 171
Congo, Rep. 182
Costa Rica 125
Cte d'Ivoire 159
Croatia 42
Cyprus 31
Czech Republic 120
Denmark 13
Djibouti 67
Dominica 74
Dominican Republic 98
Ecuador 84
Egypt, Arab Rep. 145
El Salvador 153
Equatorial Guinea 173
Eritrea 146
Table 1: OveiullPuyingTuxesiunking
Table 1: Rankings
Estonia 50
Ethiopia 103
Fiji 85
Finland 23
France 53
Gabon 146
Gambia, The 179
Georgia 33
Germany 72
Ghana 89
Greece 56
Grenada 85
Guatemala 124
Guinea 183
Guinea-Bissau 146
Guyana 118
Haiti 123
Honduras 139
Hong Kong SAR, China 4
Hungary 118
Iceland 41
India 152
Indonesia 131
Iran, Islamic Rep. 129
Iraq 65
Ireland 6
Israel 82
Italy 131
Jamaica 163
Japan 127
Jordan 35
Kazakhstan 17
Kenya 164
Kiribati 9
Korea, Rep. 30
Kosovo 44
Kuwait 11
Kyrgyz Republic 168
Lao PDR 126
Latvia 52
Lebanon 37
Lesotho 95
Liberia 45
Lithuania 60
Luxembourg 14
Macedonia, FYR 24
Madagascar 68
Malawi 58
Malaysia 15
Maldives 57
Mali 166
Malta 27
Marshall Islands 92
Table 1: Rankings
Mauritania 177
Mauritius 12
Mexico 107
Micronesia, Fed. Sts 85
Moldova 109
Mongolia 70
Montenegro 81
Morocco 110
Mozambique 105
Namibia 112
Nepal 114
Netherlands 29
New Zealand 21
Nicaragua 158
Niger 151
Nigeria 155
Norway 19
Oman 10
Pakistan 162
Palau 83
Panama 172
Papua New Guinea 106
Paraguay 141
Peru 85
Philippines 143
Poland 114
Portugal 77
Puerto Rico 104
Qatar 2
Romania 136
Russian Federation 64
Rwanda 25
Samoa 79
So Tom and Principe 144
Saudi Arabia 3
Senegal 178
Serbia 149
Seychelles 20
Sierra Leone 117
Singapore 5
Slovak Republic 100
Slovenia 63
Solomon Islands 26
South Africa 32
Spain 34
Sri Lanka 169
St. Kitts and Nevis 135
St. Lucia 43
St. Vincent and the Grenadines 72
Sudan 101
Suriname 49
Swaziland 58
Sweden 38
Table 1: Runkings
Table 1: Rankings
Switzerland 18
Syrian Arab Republic 111
Taiwan, China 54
Tajikistan 175
Tanzania 133
Thailand 96
Timor-Leste 61
Togo 167
Tonga 40
Trinidad and Tobago 90
Tunisia 62
Turkey 80
Uganda 93
Ukraine 165
United Arab Emirates 1
United Kingdom 16
United States 69
Uruguay 140
Uzbekistan 161
Vanuatu 28
Venezuela, RB 185
Vietnam 138
West Bank and Gaza 55
Yemen, Rep. 113
Zambia 47
Zimbabwe 134
Table 2: Tuxpuyments
Table 2: Tax payments Number of payments
Economy Total tax payments Prot tax payments Labour tax payments Other taxes payments
Afghanistan 20 1 12 7
Albania 44 13 12 19
Algeria 29 0 12 17
Angola 31 4 12 15
Antigua and Barbuda 57 13 24 20
Argentina 9 1 1 7
Armenia 13 1 1 11
Australia 11 1 4 6
Austria 12 1 3 8
Azerbaijan 18 1 12 5
Bahamas, The 18 1 12 5
Bahrain 13 0 12 1
Bangladesh 20 5 0 15
Barbados 28 4 12 12
Belarus 10 1 5 4
Belgium 11 1 2 8
Belize 29 12 1 16
Benin 55 5 24 26
Bhutan 8 2 2 4
Bolivia 42 1 12 29
Bosnia and Herzegovina 44 12 1 31
Botswana 32 6 13 13
Brazil 9 2 2 5
Brunei Darussalam 27 1 24 2
Bulgaria 15 1 1 13
Burkina Faso 46 2 24 20
Burundi 25 6 4 15
Cambodia 40 12 12 16
Cameroon 44 13 12 19
Canada 8 1 3 4
Cape Verde 41 3 24 14
Central African Republic 55 4 24 27
Chad 54 12 24 18
Chile 6 1 1 4
China 7 2 1 4
Colombia 9 1 1 7
Comoros 33 3 12 18
Congo, Dem. Rep. 32 1 16 15
Congo, Rep. 61 5 36 20
Costa Rica 23 5 1 17
Cte d'Ivoire 62 3 24 35
Croatia 18 1 12 5
Cyprus 28 5 12 11
Czech Republic 8 1 2 5
Denmark 10 3 1 6
Djibouti 35 5 12 18
Dominica 37 5 12 20
Dominican Republic 9 1 4 4
Ecuador 8 2 1 5
Egypt, Arab Rep. 29 1 12 16
El Salvador 53 13 24 16
Equatorial Guinea 46 1 24 21
Eritrea 30 2 12 16
Estonia 8 1 0 7
Ethiopia 31 2 12 17
Fiji 34 5 14 15
Finland 8 1 3 4
France 7 1 2 4
Gabon 26 3 4 19
Gambia, The 50 5 13 32
Georgia 5 1 1 3
Germany 9 2 1 6
Ghana 32 6 12 14
Greece 8 1 1 6
Grenada 30 1 12 17
Guatemala 24 1 12 11
Guinea 58 3 36 19
Guinea-Bissau 46 5 12 29
Guyana 35 6 12 17
Haiti 46 6 25 15
Honduras 47 5 13 29
Hong Kong SAR, China 3 1 1 1
Hungary 12 3 2 7
Iceland 29 1 1 27
India 33 2 24 7
Indonesia 51 13 24 14
Iran, Islamic Rep. 20 1 12 7
Iraq 13 1 12 0
Ireland 8 1 1 6
Israel 33 2 12 19
Italy 15 2 1 12
Jamaica 36 4 12 20
Japan 14 2 2 10
Jordan 25 1 12 12
Kazakhstan 7 1 1 5
Kenya 41 5 14 22
Kiribati 7 5 2 0
Korea, Rep. 10 1 2 7
Kosovo 33 5 12 16
Kuwait 12 0 12 0
Kyrgyz Republic 51 5 12 34
Lao PDR 34 4 12 18
Latvia 7 1 1 5
Lebanon 19 1 12 6
Lesotho 33 5 12 16
Liberia 33 5 12 16
Lithuania 11 1 2 8
Luxembourg 23 5 12 6
Macedonia, FYR 29 12 1 16
Madagascar 23 1 8 14
Malawi 26 2 8 16
Malaysia 13 2 2 9
Maldives 17 3 8 6
Mali 45 4 29 12
Malta 6 1 1 4
Marshall Islands 21 0 16 5
Mauritania 37 1 13 23
Mauritius 7 1 1 5
Mexico 6 1 2 3
Micronesia, Fed. Sts 21 0 4 17
Moldova 48 1 28 19
Mongolia 41 12 12 17
Montenegro 29 1 12 16
Morocco 17 1 12 4
Mozambique 37 7 12 18
Namibia 37 3 12 22
Nepal 34 4 12 18
Netherlands 9 1 1 7
New Zealand 8 1 2 5
Nicaragua 42 1 24 17
Niger 41 3 14 24
Nigeria 41 3 20 18
Norway 4 1 1 2
Oman 14 1 12 1
Pakistan 47 5 25 17
Palau 11 4 4 3
Panama 60 13 16 31
Papua New Guinea 33 1 13 19
Paraguay 35 5 12 18
Peru 9 1 2 6
Philippines 47 1 36 10
Poland 18 1 1 16
Portugal 8 1 1 6
Puerto Rico 16 5 6 5
Qatar 4 1 1 2
Romania 41 4 12 25
Russian Federation 7 1 2 4
Rwanda 17 4 4 9
Samoa 37 5 24 8
So Tom and Principe 42 2 12 28
Saudi Arabia 3 1 1 1
Senegal 59 3 36 20
Serbia 66 12 12 42
Seychelles 27 12 12 3
Sierra Leone 33 5 12 16
Singapore 5 1 1 3
Slovak Republic 20 1 1 18
Slovenia 11 1 1 9
Solomon Islands 33 5 12 16
South Africa 9 2 3 4
Spain 8 1 1 6
Sri Lanka 61 5 24 32
St. Kitts and Nevis 36 4 12 20
St. Lucia 32 1 12 19
St. Vincent and the Grenadines 36 4 12 20
Sudan 42 2 12 28
Suriname 29 4 12 13
Swaziland 33 2 13 18
Sweden 4 1 1 2
Switzerland 19 2 7 10
Syrian Arab Republic 19 2 12 5
Taiwan, China 12 2 3 7
Tajikistan 69 11 12 46
Tanzania 48 5 24 19
Thailand 22 2 13 7
Timor-Leste 18 5 12 1
Togo 53 5 24 24
Tonga 31 1 12 18
Trinidad and Tobago 39 4 24 11
Tunisia 8 1 4 3
Turkey 15 1 1 13
Uganda 31 3 12 16
Ukraine 28 1 24 3
United Arab Emirates 4 0 1 3
United Kingdom 8 1 1 6
United States 11 2 4 5
Uruguay 33 1 24 8
Uzbekistan 41 8 12 21
Vanuatu 31 0 12 19
Venezuela, RB 71 14 28 29
Vietnam 32 6 12 14
West Bank and Gaza 39 14 12 13
Yemen, Rep. 44 1 24 19
Zambia 37 5 13 19
Zimbabwe 49 5 14 30
Table 3: Time to comply Number of hours
Economy Total tax time Corporate income tax time Labour tax time Consumption tax time
Afghanistan 275 77 120 78
Albania 357 119 94 144
Algeria 451 152 110 189
Angola 282 75 125 82
Antigua and Barbuda 207 23 136 48
Argentina 405 105 84 216
Armenia 380 121 162 97
Australia 109 37 18 54
Austria 170 49 54 67
Azerbaijan 214 60 97 57
Bahamas, The 58 10 48 0
Bahrain 36 0 36 0
Bangladesh 302 140 0 162
Barbados 237 27 162 48
Belarus 338 166 93 79
Belgium 156 20 40 96
Belize 147 27 60 60
Benin 270 30 120 120
Bhutan 274 250 24 0
Bolivia 1025 110 507 408
Bosnia and Herzegovina 407 68 81 258
Botswana 152 40 40 72
Brazil 2600 736 490 1374
Brunei Darussalam 96 66 30 0
Bulgaria 454 33 256 165
Burkina Faso 270 30 120 120
Burundi 274 80 48 146
Cambodia 173 23 84 66
Cameroon 654 180 174 300
Canada 131 45 36 50
Cape Verde 186 35 85 66
Central African Republic 504 24 240 240
Chad 732 300 216 216
Chile 291 42 125 124
China 338 74 152 112
Colombia 203 50 87 66
Comoros 100 4 48 48
Congo, Dem. Rep. 336 116 124 96
Congo, Rep. 606 275 150 181
Costa Rica 226 18 100 108
Cte d'Ivoire 270 30 120 120
Croatia 196 60 96 40
Cyprus 147 29 78 40
Czech Republic 413 94 217 102
Denmark 130 25 65 40
Djibouti 82 30 36 16
Dominica 120 15 48 57
Dominican Republic 324 82 80 162
Ecuador 654 108 306 240
Egypt, Arab Rep. 392 69 165 158
El Salvador 320 128 96 96
Equatorial Guinea 492 145 160 187
Eritrea 216 24 96 96
Estonia 85 20 34 31
Ethiopia 306 150 132 24
Fiji 163 42 61 60
Finland 93 21 48 24
France 132 26 80 26
Gabon 488 137 131 220
Gambia, The 376 40 96 240
Georgia 280 109 56 115
Germany 207 30 134 43
Table 3: Timetocomply
Ghana 224 40 88 96
Greece 202 78 46 78
Grenada 140 32 72 36
Guatemala 332 44 132 156
Guinea 416 32 192 192
Guinea-Bissau 208 160 24 24
Guyana 263 48 48 167
Haiti 184 40 72 72
Honduras 224 35 93 96
Hong Kong SAR, China 78 50 28 0
Hungary 277 35 146 96
Iceland 140 40 60 40
India 243 45 93 105
Indonesia 259 75 94 90
Iran, Islamic Rep. 344 32 240 72
Iraq 312 24 288 0
Ireland 80 10 40 30
Israel 235 110 60 65
Italy 269 39 198 32
Jamaica 368 30 290 48
Japan 330 155 140 35
Jordan 151 10 90 51
Kazakhstan 188 75 70 43
Kenya 340 45 52 243
Kiribati 120 48 72 0
Korea, Rep. 207 94 74 39
Kosovo 164 32 42 90
Kuwait 98 0 98 0
Kyrgyz Republic 210 60 71 79
Lao PDR 362 138 42 182
Latvia 264 31 139 94
Lebanon 180 40 100 40
Lesotho 324 70 104 150
Liberia 158 60 60 38
Lithuania 175 32 85 58
Luxembourg 59 21 14 24
Macedonia, FYR 119 19 56 44
Madagascar 201 9 72 120
Malawi 175 67 78 30
Malaysia 133 26 77 30
Maldives 252 100 91 61
Mali 270 30 120 120
Malta 139 23 92 24
Marshall Islands 128 0 96 32
Mauritania 696 120 96 480
Mauritius 161 36 61 64
Mexico 337 155 69 113
Micronesia, Fed. Sts 128 0 96 32
Moldova 220 72 94 54
Mongolia 192 57 63 72
Montenegro 320 43 98 179
Morocco 238 70 48 120
Mozambique 230 50 60 120
Namibia 350 40 46 264
Nepal 326 120 84 122
Netherlands 127 25 64 38
New Zealand 152 34 59 59
Nicaragua 207 67 76 64
Niger 270 30 120 120
Nigeria 956 398 396 162
Norway 87 24 15 48
Oman 62 50 12 0
Pakistan 560 40 40 480
Palau 142 46 96 0
Panama 431 85 156 190
Papua New Guinea 207 153 8 46
Paraguay 387 144 96 147
Peru 293 39 144 110
Philippines 193 42 38 113
Poland 286 62 124 100
Portugal 275 63 116 96
Puerto Rico 218 80 60 78
Qatar 48 12 36 0
Romania 216 40 118 58
Russian Federation 177 60 76 41
Rwanda 134 20 48 66
Samoa 224 48 96 80
So Tom and Principe 424 40 192 192
Saudi Arabia 72 32 40 0
Senegal 666 120 96 450
Serbia 279 48 126 105
Seychelles 76 40 36 0
Sierra Leone 357 15 168 174
Singapore 82 32 10 40
Slovak Republic 207 42 62 103
Slovenia 260 90 96 74
Solomon Islands 80 8 30 42
South Africa 200 100 50 50
Spain 167 33 90 44
Sri Lanka 254 16 96 142
St. Kitts and Nevis 203 27 128 48
St. Lucia 92 11 51 30
St. Vincent and the Grenadines 111 14 52 45
Sudan 180 70 70 40
Suriname 199 48 24 127
Swaziland 104 8 48 48
Sweden 122 50 36 36
Switzerland 63 15 40 8
Syrian Arab Republic 336 300 36 0
Taiwan, China 221 161 27 33
Tajikistan 224 80 48 96
Tanzania 172 60 52 60
Thailand 264 160 48 56
Timor-Leste 276 132 144 0
Togo 270 30 120 120
Tonga 164 8 12 144
Trinidad and Tobago 210 45 75 90
Tunisia 144 64 30 50
Turkey 223 46 80 97
Uganda 213 45 66 102
Ukraine 491 109 192 190
United Arab Emirates 12 0 12 0
United Kingdom 110 40 45 25
United States 175 87 55 33
Uruguay 310 88 114 108
Uzbekistan 205 66 69 70
Vanuatu 120 0 24 96
Venezuela, RB 792 120 288 384
Vietnam 872 217 335 320
West Bank and Gaza 154 10 96 48
Yemen, Rep. 248 56 72 120
Zambia 132 48 24 60
Zimbabwe 242 78 96 68
Table 4: TotulTuxRute
Table 4: Total Tax Rate Total Tax Rate
Economy Total Tax Rate Prot tax Total Tax Rate Labour tax Total Tax Rate Other taxes Total Tax Rate
Afghanistan 36.4 0.0 0.0 36.4
Albania 38.7 8.6 25.3 4.8
Algeria 72.0 6.6 29.7 35.7
Angola 53.2 24.6 9.0 19.6
Antigua and Barbuda 41.5 26.0 9.5 6.0
Argentina 108.3 2.7 29.4 76.2
Armenia 38.8 15.0 23.0 0.8
Australia 47.5 26.0 20.3 1.2
Austria 53.1 15.0 34.7 3.4
Azerbaijan 40.0 12.9 24.8 2.3
Bahamas, The 47.8 33.0 6.1 8.7
Bahrain 13.9 0.0 13.5 0.4
Bangladesh 35.0 25.7 0.0 9.3
Barbados 45.4 24.1 12.7 8.6
Belarus 60.7 20.3 39.0 1.4
Belgium 57.7 5.4 50.8 1.5
Belize 33.2 24.7 7.0 1.5
Benin 65.9 14.8 27.3 23.8
Bhutan 40.8 36.3 0.0 4.5
Bolivia 83.4 0.0 18.8 64.6
Bosnia and Herzegovina 24.1 7.2 12.6 4.3
Botswana 25.3 21.7 0.0 3.6
Brazil 69.3 24.6 40.8 3.9
Brunei Darussalam 16.8 8.3 8.5 0.0
Bulgaria 28.7 4.8 20.2 3.7
Burkina Faso 43.6 14.8 22.6 6.2
Burundi 53.0 40.0 10.2 2.8
Cambodia 22.5 18.9 0.1 3.5
Cameroon 49.1 29.9 18.3 0.9
Canada 26.9 8.4 12.7 5.8
Cape Verde 37.2 18.0 18.5 0.7
Central African Republic 65.2 0.0 19.8 45.4
Chad 65.4 31.3 28.4 5.7
Chile 28.1 21.1 3.8 3.2
China 63.7 6.2 49.6 7.9
Colombia 74.4 19.2 28.8 26.4
Comoros 217.9 31.4 0.0 186.5
Congo, Dem. Rep. 339.7 58.9 7.9 272.9
Congo, Rep. 62.9 15.1 32.5 15.3
Costa Rica 55.0 18.9 29.5 6.6
Cte d'Ivoire 39.5 9.8 20.1 9.6
Croatia 32.8 11.3 19.4 2.1
Cyprus 23.0 9.0 11.8 2.2
Czech Republic 49.2 7.5 38.4 3.3
Denmark 27.7 20.0 3.6 4.1
Djibouti 38.7 17.7 17.7 3.3
Dominica 37.5 25.9 7.9 3.7
Dominican Republic 42.5 22.1 18.6 1.8
Ecuador 34.6 17.7 13.7 3.2
Egypt, Arab Rep. 42.6 13.2 25.8 3.6
El Salvador 35.0 17.0 17.2 0.8
Equatorial Guinea 46.0 0.0 25.4 20.6
Eritrea 84.5 8.8 0.0 75.7
Estonia 67.3 8.0 39.4 19.9
Ethiopia 33.3 27.0 2.0 4.3
Fiji 37.6 27.3 10.2 0.1
Finland 40.6 15.0 24.4 1.2
France 65.7 8.2 51.7 5.8
Gabon 43.5 18.4 22.7 2.4
Gambia, The 283.5 6.1 12.8 264.6
Georgia 16.5 14.3 0.0 2.2
Germany 46.8 19.0 21.9 5.9
Ghana 33.5 18.5 14.7 0.3
Greece 44.6 11.0 32.2 1.4
Grenada 45.3 27.6 5.6 12.1
Guatemala 40.9 25.9 14.3 0.7
Guinea 73.2 23.5 9.6 40.1
Guinea-Bissau 45.9 14.9 24.8 6.2
Guyana 36.1 23.8 8.8 3.5
Haiti 40.8 24.1 12.4 4.3
Honduras 40.3 26.6 5.1 8.6
Hong Kong SAR, China 23.0 17.6 5.3 0.1
Hungary 50.3 12.3 34.5 3.5
Iceland 33.0 10.4 9.8 12.8
India 61.8 24.6 18.2 19.0
Indonesia 34.5 23.7 10.6 0.2
Iran, Islamic Rep. 44.1 17.8 25.9 0.4
Iraq 28.1 14.6 13.5 0.0
Ireland 26.4 11.9 11.6 2.9
Israel 30.5 22.1 5.3 3.1
Italy 68.3 22.9 43.4 2.0
Jamaica 45.6 25.7 12.9 7.0
Japan 50.0 26.9 17.4 5.7
Jordan 28.1 12.9 12.9 2.3
Kazakhstan 28.6 15.9 11.2 1.5
Kenya 44.4 28.1 6.8 9.5
Kiribati 31.8 23.3 8.5 0.0
Korea, Rep. 29.8 15.2 13.2 1.4
Kosovo 15.4 9.1 5.6 0.7
Kuwait 10.7 0.0 10.7 0.0
Kyrgyz Republic 68.9 6.2 19.5 43.2
Lao PDR 33.3 24.8 5.6 2.9
Latvia 36.6 4.8 27.3 4.5
Lebanon 30.2 6.1 24.1 0.0
Lesotho 16.0 13.1 0.0 2.9
Liberia 27.4 18.3 5.4 3.7
Lithuania 43.7 5.9 35.1 2.7
Luxembourg 21.0 4.1 15.4 1.5
Macedonia, FYR 9.4 6.2 0.0 3.2
Madagascar 36.0 14.0 20.3 1.7
Malawi 34.7 23.6 7.7 3.4
Malaysia 24.5 7.5 15.6 1.4
Maldives 30.7 13.5 7.9 9.3
Mali 51.7 10.9 34.3 6.5
Malta 41.6 29.2 11.3 1.1
Marshall Islands 64.9 0.0 11.8 53.1
Mauritania 68.2 0.0 17.6 50.6
Mauritius 28.5 11.6 9.6 7.3
Mexico 52.5 24.6 26.5 1.4
Micronesia, Fed. Sts 58.7 0.0 6.8 51.9
Moldova 31.2 0.0 30.6 0.6
Mongolia 24.6 10.2 12.4 2.0
Montenegro 22.3 7.1 12.8 2.4
Morocco 49.6 25.2 22.7 1.7
Mozambique 34.3 27.7 4.5 2.1
Namibia 22.7 17.2 1.0 4.5
Nepal 31.5 17.2 11.3 3.0
Netherlands 40.1 20.6 18.1 1.4
New Zealand 33.5 28.8 3.7 1.0
Nicaragua 65.0 22.9 20.3 21.8
Niger 43.8 17.3 20.1 6.4
Nigeria 33.8 22.3 10.8 0.7
Norway 41.6 24.4 15.9 1.3
Oman 22.0 10.0 11.8 0.2
Pakistan 35.3 17.9 15.1 2.3
Palau 75.7 65.8 9.3 0.6
Panama 42.0 12.5 19.8 9.7
Papua New Guinea 42.2 22.0 11.7 8.5
Paraguay 35.0 9.6 18.6 6.8
Peru 40.5 26.7 11.0 2.8
Philippines 46.6 21.1 11.3 14.2
Poland 43.8 17.4 23.8 2.6
Portugal 42.6 14.5 26.8 1.3
Puerto Rico 50.7 15.8 14.4 20.5
Qatar 11.3 0.0 11.3 0.0
Romania 44.2 10.5 31.5 2.2
Russian Federation 54.1 7.1 41.2 5.8
Rwanda 31.3 21.2 5.6 4.5
Samoa 18.9 11.9 7.0 0.0
So Tom and Principe 32.5 22.1 6.8 3.6
Saudi Arabia 14.5 2.1 12.4 0.0
Senegal 46.0 14.8 24.1 7.1
Serbia 34.0 11.6 20.2 2.2
Seychelles 25.7 23.3 1.7 0.7
Sierra Leone 32.1 17.6 11.3 3.2
Singapore 27.6 6.0 17.0 4.6
Slovak Republic 47.9 6.8 39.6 1.5
Slovenia 34.7 14.1 18.2 2.4
Solomon Islands 25.3 15.0 8.5 1.8
South Africa 33.3 24.3 4.1 4.9
Spain 38.7 1.2 36.8 0.7
Sri Lanka 50.1 1.6 16.9 31.6
St. Kitts and Nevis 52.1 32.1 11.3 8.7
St. Lucia 34.6 25.8 5.6 3.2
St. Vincent and the Grenadines 38.7 30.2 5.1 3.4
Sudan 36.1 13.8 19.2 3.1
Suriname 27.9 27.9 0.0 0.0
Swaziland 36.8 28.1 4.0 4.7
Sweden 53.0 15.7 35.5 1.8
Switzerland 30.2 8.9 17.7 3.6
Syrian Arab Republic 39.7 20.0 19.3 0.4
Taiwan, China 34.8 12.7 18.6 3.5
Tajikistan 84.5 0.0 28.5 56.0
Tanzania 45.3 20.2 18.0 7.1
Thailand 37.6 28.1 5.7 3.8
Timor-Leste 15.1 14.9 0.0 0.2
Togo 49.5 9.3 26.5 13.7
Tonga 25.7 24.3 0.0 1.4
Trinidad and Tobago 29.1 21.6 5.8 1.7
Tunisia 62.9 15.2 25.2 22.5
Turkey 41.2 17.9 18.8 4.5
Uganda 37.1 25.0 11.3 0.8
Ukraine 55.4 11.6 43.1 0.7
United Arab Emirates 14.9 0.0 14.1 0.8
United Kingdom 35.5 22.2 10.2 3.1
United States 46.7 27.6 10.0 9.1
Uruguay 42.0 23.6 15.6 2.8
Uzbekistan 98.5 0.9 28.2 69.4
Vanuatu 8.4 0.0 4.5 3.9
Venezuela, RB 62.7 6.1 18.0 38.6
Vietnam 34.5 11.6 22.6 0.3
West Bank and Gaza 16.8 16.2 0.0 0.6
Yemen, Rep. 32.9 20.0 11.3 1.6
Zambia 15.2 1.1 10.4 3.7
Zimbabwe 35.8 20.5 5.1 10.2
WorldBonkondIFCPoyinToxesteom
TeuTiumbic
NunJiung
PuwelKopko,
NinuPuustiun
MomodouSuliluSey
PwCPoyinToxesteom
NevilleHowlett
VeionicuBusuiub
UgoclukwuDibiu
KennetlNjugunu
The Total Tax Rate included in the survey by the
World Bank Group has been calculated using
the broad principles of the PwC methodology.
The application of these principles by the World
Bank Group has not been veried, validated or
audited by PwC, and therefore, PwC cannot make
any representations or warranties with regard to
the accuracy of the information generated by the
World Bank Groups models. In addition, the World
Bank Group has not veried, validated or audited
any information collected by PwC beyond the
scope of Doing Business Paying Taxes data, and
therefore, the World Bank Group cannot make any
representations or warranties with regard to the
accuracy of the information generated by PwCs
own research.
The World Bank Groups Doing Business tax
ranking indicator includes two components in
addition to the Total Tax Rate. These estimate
compliance costs by looking at hours spent on tax
work and the number of tax payments made in a
tax year. These calculations do not follow any PwC
methodology but do attempt to provide data which
is consistent with the tax compliance cost aspect
of the PwC Total Tax Contribution framework.
PwC rms help organisations and individuals
create the value theyre looking for. Were a
network of rms in 158 countries with more than
180,000 people who are committed to delivering
quality in assurance, tax and advisory services.
Tell us what matters to you and nd out more by
visiting us at www.pwc.com.
This publication has been prepared as general
information on matters of interest only, and
does not constitute professional advice. No
one should act upon the information contained
in this publication without obtaining specic
professional advice. No representation or warranty
(express or implied) is given as to the accuracy or
completeness of the information contained in this
publication, and, to the extent permitted by law,
neither PwC nor the World Bank Group accept
or assume any liability, responsibility or duty of
care for any consequences of anyone else acting,
or refraining to act, in reliance on the information
contained in this publication or for any decision
based on it. The World Bank Group does not
guarantee the accuracy of the data included in this
work. The boundaries, colours, denominations,
and other information shown on any map in this
work do not imply any judgement on the part of
The World Bank Group concerning the legal status
of any territory or the endorsement or acceptance
of such boundaries. The ndings, interpretations,
and conclusions expressed herein are those of
the author(s) and do not necessarily reect the
views of the Executive Directors of the World Bank
Group or the governments they represent.
This publication may be copied and disseminated
in its entirety, retaining all featured logos, names,
copyright notice and disclaimers. Extracts from
this publication may be copied and disseminated,
including publication in other documentation,
provided always that the extract is clearly
identied as such and that a source notice is
used as follows: for extracts from any section
of this publication except Chapter 1, use the
source notice

2012 PwC. All rights reserved. Extract from
Paying Taxes 2013 publication, available on
www.pwc.com/payingtaxes. For extracts from
Chapter 1 only, use the source notice: 2012
The World Bank Group. All rights reserved. Extract
from Paying Taxes 2013 publication, available on
www.pwc.com/payingtaxes.
All other queries on rights and licenses, including
subsidiary rights, should be addressed to the
Ofce of the Publisher, The World Bank, 1818 H
Street NW, Washington, DC 20433, USA; fax: 202-
522-2422; email: pubrights@worldbank.org.
2012 PwC and the World Bank Group. All rights
reserved. PwC refers to the PwC network and/or
one or more of its member rms, each of which
is a separate legal entity. Please see www.pwc.
com/structure for further details. The World Bank
Group refers to the legally separate but afliated
international organisations: International Bank for
Reconstruction and Development, International
Development Association, Multilateral Investment
Guarantee Agency, International Finance
Corporation and International Center for the
Settlement of Investment Disputes.
Printed using an FSC certied, 100%
recycled, chlorine process free paper from
sustainable sources.
10/12. Design Services 27894.
www.pwc.com/puyingtuxes
www.doingbusiness.oig
P
o
y
i
n
T
o
x
e
s
2
0
1
3
.
T
l
e
g
l
o
b
u
l
p
i
c
t
u
i
e

Paying Taxes 2013

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Paying Taxes 2013

Загружено:

Авторское право:

Доступные форматы

Poyin

Augusto Lopez Claros

Total Tax Rate falls

Time to comply falls

A two tieied coipoiute tux iute (ol

Вам также может понравиться