1011 IFC - Paying Taxes 2011

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Paying Taxes 2011
Tleglobulpictuie
0singduruco||ccrcd
|tom1SJcconomics,
PuyingTuxcscnub|csu
computisono|ruxsysrcms
utoundrncwot|dusrncy
impucrbusincss.
2 Paying Taxes 2011
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or, as the context requires, individual member rms of the PwC network.
Paying Taxes 2011 3
Contents
Foiewoid 1
Key tlemes und ndings 3
Chapter1:FindingsoltleWoildBunk S
undIFCsuoingBusincss2011iepoit
Chapter2:PwCcommentuiy.Aluii,stubleund 17
sustuinubletuxsystemtleclullengeloigoveinments
intlewukeoltleglobuleconomicdowntuin.
Chapter3:UsingtlePuyingTuxesdutuuioundtlewoild S1
Appendlx1:TlePuyingTuxesmetlodology 73
Appendlx2:AboutuoingBusincss:meusuiingloiimpuct 79
CommentuiyliomtleWoildBunkundIFC
Appendlx3:TlePuyingTuxesieloims 83
SummuiisedbytleWoildBunkundIFC
Appendlx4:Tledututubles 87
1 Paying Taxes 2011
Foreword
We uie pleused to piesent tle ltl
editionolPuyingTuxcsrncg|obu|
picrutc.Tlisisujointpublicution
pioducedbytleWoildBunk,tle
InteinutionulFinunceCoipoiution
(IFC)undPwC.Tlestudyisbused
ondutucollecteduspuitoltle
uoing Busincsspioject.
Tlisistlemostclullengingtimeevei
loipuyingtuxes.Tleiecentglobul
downtuinlusclungedtleeconomic
lundscupe signicuntly und in un
unpiecedentedluslion.Goveinmentsin
economiesolullsizesundutullstuges
oldevelopmentuiestiugglingwitltle
tuxpolicycloicesuvuilubletotlem.Foi
compunies,tleclullengeisdeulingwitl
tlelossolpublictiustundincieused
sciutinyoveilowmucltuxtleypuy.
PuyingTuxeslooksuttleimpuctoltux
systemsonbusinessusingucusestudy
compuny,butitdoesnotconsideitle
costsloisocietyusuwlolenoitle
benets tlut tuxes piovide. Howevei,
tleweultloldutucollectedbytle
PuyingTuxespiojectmukesitunique.
Itcoveis183economiesundenubles
unussessmentoltuxsystemsuiound
tlewoildliomtlepointolviewol
businessoveiusixyeuipeiiod.Tle
dutupiesentedundtlemetlodology
usedisuniquetotlepioject.Tlestudy
looksbeyondcoipoiuteincometux
utulloltletuxesundcontiibutions
mundutedbygoveinmentloiouicuse
studycompuny,undconsideistleiilull
impuctonbusinessinteimsolbotltleii
tuxcostundtleiicompliuncebuiden.
Goveinmentsluveconsistentlyslown
gieutinteiestintleiesultsoltlisstudy,
usitenublestlemtomukecompuiisons
witlgeogiuplicneiglbouisund
economicpeeigioups.
Munyexumplesollowgoveinments
uieusingtlestudyuieincludedintlis
iepoit.TleyslowlowPuyingTuxes
luslelpedtoincieuseiecognitionol
lowgoveinmentsuiestiivingtoimpiove
tleiisystemsundembiucebestpiuctices,
undlowsomeuieuclievingiesults.
AnimpoituntpuitoltleuoingBusincss
undPuyingTuxespiojectisnotonly
topiesentunddiscusstleiesultsol
tlestudy,butulsotoensuieunuctive
outieuclpiogiummeolconsultution
witlinteiestedgioups.Tlislelpsto
developundenluncetleuppiouclused.
We lope tlut you continue to nd tle
iesultsinteiestingunduselul,undlook
loiwuidtoieceivingyouileedbuck.
Tuxesuieessentiultoeconomicund
sociuldevelopment.Businesslusu
keyioletopluyunditisimpoituntloi
goveinments,businessundcivilsociety
tolosteiunewcolluboiutiveuppiouclto
meettlecommonuimsoluluii,stuble
undsustuinubletuxsystem.
Neil Gregory
ActingDiiectoi,GlobulIndicutois
undAnulysis
WoildBunkundIFC
Susan Symons
TotulTuxContiibutionLeudei
PwCUK
Paying Taxes 2011 2
This is the most
challenging time
ever for paying taxes.
Tnctcccnrg|obu|downrutn
nuscnungcdrnccconomic
|undscupcsignicunr|yundin
ununptcccdcnrcd |usnion
Taxes are essential
to economic and
VRFLDObGHYHORSPHQW
Busincssnusulcyto|cro
p|uyundirisimpotrunr|ot
govctnmcnrs,busincssund
civi|socicryro|osrctuncw
co||uboturivcupptoucnro
mccrrnccommonuimso|u
|uit,srub|cundsusruinub|c
rux sysrcm.
3 Paying Taxes 2011
Key themes
and findings
Tuxesuietlepiiceyoupuyloicivilisution.
Tuxespiovidegoveinmentievenues,undtlose
wlopuytlemluveustukeintlesystemundin
lowgoveinmentspendsitsmoney.Tuxesuie
u lile blood ol u stuble und piospeioussociety.
Intlewukeoltleglobuleconomicdowntuin
levying tux is even moie dilcult. Witl luige
stiuctuiul decits in tle big developed economies,
scul policy lus nevei been undei so mucl public
sciutiny.Wliletleieisucleuiexpectutiontlut
economieswillneedtoiuisetuxesuswellus
mukingspendingcuts,tleywillneedtoiemuin
cuutiousinlowtleyiuisetuxestoensuietlut
iecoveiy is not stied. Foi developing economies,
witlcutsinuidbudgets,tuxievenuesmuypiove
to be u moie sustuinuble souice ol nuncing. But
clullengesiemuininteimsolcombutingcupitul
iglt, ieducing tle size ol tle inloimul economy
undlelpingtuxuutloiitiestomonitoicompliunce
undcollecttuxes.
* Oliver Wendell Holmes, US Supreme Court of Justice, 1904
Paying Taxes 2011 4
Tle ndings piesented in tlis
iepoitcomeliomtleunulysisoltle
udministiutivebuidenundtletuxcost
ol locul ims bused on tle Puying Tuxes
metlodology.
What the data shows:
Onuveiugeouicusestudycompunypuys
neuily lull ol its commeiciul piot in
tuxes,spendssevenweeksdeulingwitl
itstuxulluiisundmukesutuxpuyment
eveiy12duys.
PaylngtaxeslseaslestIor
buslnesslnhlgh-lncome
economles.Tleyluvetlelowest
tuxcostundtlelowestudministiutive
buiden.Tleseeconomiestendtoluve
moiemutuietuxsystems,
uliglteiudministiutivetouclund
gieuteiuseoltleelectionicinteiluce
witltuxuutloiities.
TaxreIormlsstlllhlghon
governmentagendasaroundthe
world.Foityeconomiesmudeiteusiei
topuytuxescompuiedwitl4Slustyeui.
Reducing iutes ol piot tux is still tle
mostpopuluiieloim,buteusingtle
compliuncebuidenisequullyimpoitunt
loibusiness.Tleieispotentiulloimoie
locusontlisuieu.
5lnce the rst study was carrled
out ve years ago, tax reIorm
hasdrlvenadownwardtrendln
theresults.60%oleconomiesintle
studyluvecuiiiedouttuxieloimduiing
tlistime.Foitleeconomieswlicluie
includedinbotltle2006und2011
studies,tletuxcostluslullenonuveiuge
byS.0%,tletimeneededtocomplyby
uweek,undtlenumbeiolpuymentsby
ulmostloui.
The Total Tax Rate {TTR), tlme
tocomplyandthenumberoI
paymentshaveIallenmostln
EasternEuropeanandCentral
Aslaneconomlesslncethestudy
began.TleloweiTTRlusbeendiiven
luigelybyloweiiutesolcoipoiute
incometuxinsomeeconomies,butulso
by signicunt ieductions in otlei tuxes
suclustuinoveitux.Tlenumbeiol
puymentsluslullenduetodecieusesin
uctuulpuymentsuswellustleimpuct
ol electionic ling und puyment. Tlis
lusulsolelpedtodiivedowntletime
tocomply.
Certalnpractlceshavebeen
eIIectlvelnreduclngthestudy
results.Tleseincludetuxsystems
wlicl luve ellective electionic ling
undpuyment(60economiescuiiently
do),tlosewliclluveonetuxpeibuse
(S0economiesnowluveonetuxpei
buseiutleitlunmultipletuxes),und
tlose wlicl use u ling system bused on
sell-ussessment(74%oleconomiesullow
ims to culculute tleii own tux bills).
Corporatelncometaxlsonly
oneoImanytaxesandlsonly
partoItheburden.Ouicompuny
puysmoietlunninedilleienttuxeson
uveiugeuioundtlewoild.Inuddition
tocoipoiuteincometux,tleieuieon
uveiugetwolubouituxes,uconsumption
tux,upiopeitytuxundlouiotleituxes.
Corporatelncometaxonly
accountsIoronly12oI
payments, 25 oI the tlme to
complyand3BoItheTTR.Any
ieloimugendutleieloieneedstolook
beyondcoipoiuteincometux.Luboui
tuxesundsociulcontiibutionsund
otleituxesuddtotletuxcostund
compliuncebuiden.
ThestatutoryrateoIcorporate
lncometaxlsnotagoodlndlcator
oItheamountoItaxacompany
pays.Geneioustuxullowuncesin
some economies signicuntly ieduce
tlecoipoiuteincometuxpuid,wlilein
otleis,disullowuncescunincieusetle
ellectiveiuteolcoipoiuteincometux.
Valueaddedtaxlsthe
predomlnantIormoI
consumptlontaxusedaround
theworld.Ittukeslongeiloioui
cusestudycompunytocomplywitlits
VATulluiistlunitdoestocomplywitl
coipoiuteincometux.Tletimeneeded
loiVATulsovuiiesconsideiublyund
isdependentontleudministiutive
piucticesimplementedineucleconomy.
Goodtaxadmlnlstratlonlsalso
lmportant.Tleuppioucloltletux
uutloiitiesunddeulingwitltuxuudits
unddisputesuietleuspectsoltletux
systemtlutcontiibutoisuioundtle
woildmostwunttoimpiove.
Onuvctugcoutcusc
srudycompunypuys
ncut|ynu||o|irs
commctciu|ptorin
ruxcs,spcndsscvcnwccls
dcu|ingwirnirsrux
u||uitsundmulcsurux
puymcnrcvcty12duys.
6 Paying Taxes 2011
Paying Taxes:
FindingsoltleWoildBunk
undIFCsuoingBusincss
2011iepoit
FoiCuiolinu,wloownsundmunuges
uColombiun-busedietuilbusiness,
puyingtuxeslusbecomeeusieiintle
pustlewyeuis.In2004sleludtomuke
69puymentsol13dilleienttypesol
tuxesundspendS7duys(4S6louis),
ulmosttlieemontls,tocomplywitl
tuxiegulutions.
1
Toduy,tlunkstonew
electionicsystemstopuysociulsecuiity
contiibutions,sleneedstomukeonly
20puymentsundspend26duys(208
louis)uyeuiontlesumetusk.Butligl
tux iutes meun tlut lei im still lus
to puy ubout 78.7% ol piot in tuxes.
Juliunu,tleowneiolujuicepiocessing
luctoiyinUgundu,lucesudilleient
enviionment.Slemukes32puyments
cuttingucioss16tuxiegimesundspends
ubout20duys(161louis)uyeuion
compliunce.Slelustopuyonly3S.7%
ol lei piot in tuxes. But tluts not ull.
Recentevidencesuggeststlutindeuling
witlgoveinmentuutloiities,lemule-
ownedbusinessesinUgunduuieloiced
to puy signicuntly moie biibes und uie
utgieuteiiiskolluiussmenttlunmule-
ownedbusinesses.
2
Chapter1:FindingsoltleWoildBunkundIFCsuoingBusincss2011iepoit
1
Days refer to working days, calculated by assuming eight working hours a day. Months are calculated by assuming 20 working
days a month.
2
Ellis, Manuel and Blackden (2006).
Who improved the most in the ease of
paying taxes?
1. Tunisia
2. Cape Verde
3. So Tom and Principe
4. Canada
5. Macedonia, FYR
6. Bulgaria
7. China
8. Hungary
9. Taiwan, China
10. Netherlands
Figure 1.1
Entrepreneuers in Tunisia benet from
e-system for paying taxes
Payments
2008
Improvement (%)
2009
Time
14 fewer
payments 64%
84 hours
saved 37%
Source: Doing Business database
Paying Taxes 2011 7
3
World Bank (2010b).
4
Globally, companies ranked tax rates 4th among 16 obstacles to business in the World Bank Enterprise Surveys 2006 to 2009 (http://www.enterprisesurveys.org).
5
Canada, as part of a plan to stimulate growth and restore condence, reduced the general corporate tax rate to 19% as of 1 January 2009. In Germany a stimulus package adopted in November
2008 introduced declining balance depreciation at 25% for movable assets for two years and temporarily expanded special depreciation allowances for small and medium-size enterprises. A
second stimulus package, approved in February 2009, provided further tax cuts. In January 2009 Singapores Ministry of Finance announced a $15 billion resilience package to help businesses
and workers and reduced corporate income tax rates from 18% to 17%.
6
International Tax Dialogue (2007).
Someeconomiestieutwomendilleiently
byluw.CtedIvoiieisunexumple.
Tleie, muiiied women cun puy ve
timesusmuclpeisonulincometuxus
tleiilusbundsdoontlesumeumount
olincome.Tlieeotleieconomiesulso
imposeligleituxesonwomenBuikinu
Fuso,IndonesiuundLebunon.ButIsiuel,
KoieuundSingupoieimposeloweituxes
onwomen,toencouiugetlemtoentei
tlewoikloice.Explicitgendeibiusin
tletuxluwcunullectwomensdecision
towoikintleloimulsectoiundiepoit
tleiiincomeloituxpuiposes.
3
Reloims
tlutsimplilytuxudministiutionund
mukeiteusieiloieveiyoneindividuuls
und ims to puy tuxes cun ulso iemove
gendeibiuses.
Tuxesuieessentiul.Inmosteconomies
tletuxsystemistlepiimuiysouiceol
lundingloiuwideiungeolsociulund
economicpiogiummes.Howmucl
ievenuetleseeconomiesneedtoiuise
tliougltuxeswilldependonseveiul
luctois,includingtlegoveinments
cupucitytoiuiseievenueinotleiwuys,
suclusientsonnutuiuliesouices.
Besidespuyingloipublicgoodsund
seivices,tuxesulsopiovideumeuns
oliedistiibutingincome,includingto
clildien,tleugedundtleunemployed.
Buttleleveloltuxiutesneedstobe
cuielully closen. Recent im suiveys
in123economiesslowtlutcompunies
consideituxiutestobeumongtletop
louiconstiuintstotleiibusiness.
4
Tle
economic und nunciul ciisis lus cuused
scul constiuints loi muny economies,
yetmunyuiestillcloosingtoloweitux
iutesonbusinesses.Seventeenieduced
piot tux iutes in 2009/10. Cunudu,
GeimunyundSingupoieimplemented
tuxcutsin2009tolelpbusinessescope
witleconomicslowdown.
S
Keepingtuxiutesutuieusonublelevel
cunbeimpoituntloiencouiugingtle
developmentoltlepiivutesectoi
undtleloimulisutionolbusinesses.
Tlisispuiticuluilyielevuntloismull
undmedium-sizeenteipiises,wlicl
contiibutetojobcieutionundgiowtl
but do not udd signicuntly to tux
ievenue.
6
Tuxutionluigelybypusses
tleinloimulsectoi,undoveituxing
usliinkingloimulsectoileudsto
iesentmentundgieuteituxuvoidunce.
Decisionsonwlototuxundwlutstuge
olucompunysbusinesscycletotuxcun
be inuenced by muny dilleient luctois
tlut go beyond tle scope ol tlisstudy.
Tleeconomicund
nunciul ciisis
lus cuused scul
constiuintsloi
munyeconomies,
yetmunyuie
stillcloosingto
loweituxiutes
onbusinesses
8 Paying Taxes 2011
Tuxievenueulsodependson
goveinmentsudministiutivecupucity
to collect tuxes und ims willingness
tocomply.Compliuncewitltuxluwsis
impoitunttokeeptlesystemwoiking
loiullundtosuppoittlepiogiummes
undseivicestlutimpiovelives.Keeping
iulesussimpleundcleuiuspossible
isundoubtedlylelplultotuxpuyeis.
Oveilycomplicutedtuxsystemsiiskligl
evusion.Higltuxcompliuncecostsuie
ussociutedwitlluigeiinloimulsectois,
moiecoiiuptionundlessinvestment.
Economieswitlwell-designedtux
systemsuieubletolelptlegiowtlol
businessesund,ultimutely,oloveiull
investmentundemployment.
7
uoingBusincssuddiessestleseconceins
witltlieeindicutois:puyments,time
undtleTotulTuxRute(TTR)boineby
u stunduid im witl 60 employees in
ugivenyeui.Tlenumbeiolpuyments
indicutoimeusuiestleliequency
witl wlicl tle compuny lus to le
undpuydilleienttypesoltuxesund
contiibutions,udjustedloitlewuyin
wlicltlosepuymentsuiemude.Tle
timeindicutoicuptuiestlenumbeiol
louis it tukes to piepuie, le und puy
tliee mujoi types ol tuxes: piot tuxes,
consumptiontuxesundlubouituxes
undmundutoiycontiibutions.TleTTR
meusuiestletuxcostboinebytle
stunduid im (guie 1.2).
8
Witltleseindicutois,uoingBusincss
compuiestuxsystemsundtiuckstux
ieloimsuioundtlewoildliomtle
peispectiveolloculbusinesses,coveiing
botltlediiectcostoltuxesundtle
udministiutivebuidenolcomplying
witl tlem. It does not meusuie tle scul
leultloleconomies,tlemucioeconomic
conditionsundeiwliclgoveinments
collectievenueoitlepiovisionolpublic
seivicessuppoitedbytuxution.
Tletopteneconomiesontleeuse
olpuyingtuxesiepiesentuiungeol
ievenuemodels,euclwitldilleient
implicutionsloitletuxbuidenolu
domestic medium-size business (guie
1.3).Tletoptenincludeseveiul
economiestlutuiesmulloiiesouice
iicl.Buttlesecluiucteiisticsdonot
necessuiilymutteiloitleudministiutive
buidenoiTTRlucedbybusinesses(see
boxoveileul).
7
Djankov and others (2010).
8
The company has 60 employees and start-up capital of 102 times income per capita.
Figure 1.2
What are the time, Total Tax Rate and number of payments necessary for a local medium-sized
company to pay all taxes?
Easiest Rank
Maldives 1
Qatar 2
Hong Kong SAR, China 3
Singapore 4
United Arab Emirates 5
Saudi Arabia 6
Ireland 7
Oman 8
Kuwait 9
Canada 10
Most difcult Rank
Jamaica 174
Panama 175
Gambia, The 176
Bolivia 177
Venezuela, RB 178
Chad 179
Congo, Rep. 180
Ukraine 181
Central African Republic 182
Belarus 183
Note: Rankings are the average of the economy's rankings on the number of payments, time and Total Tax Rate. See Appendix 1
for details.
Source: Doing Business database.
Figure 1.3
Where is paying taxes easy and where not?
Total Tax Rate
Percentage of profit before all taxes
Number of payments
(Per year)
Time (hours per year)
To prepare, file and pay value added or sales tax,
profit tax and labour taxes and contributions
0 10 20 30 40 50
Paying Taxes 2011 9
Does an economys size or
resource wealth matter for
the ease of paying taxes?
Someeconomies,especiullysmull
ones,ielyononeoitwosectoisto
geneiutemostgoveinmentievenue.
Tlisenublestlemtolunctionwitl
unuiioweituxbusetlunwould
bepossibleinluigei,moiediveise
economies.MuldivesundKiiibuti,loi
exumple,cloosetotuxmuinlylotels
undtouiism,sectoisnotcuptuied
bytleuoingBusincssindicutois,
wlicllocusonmunuluctuiing.Otlei
economies,suclusQutui,tleUnited
AiubEmiiutes,SuudiAiubiuund
Omun,uieiesouice-iicleconomies
tlutiuisemostpublicievenue
tliouglmeunsotleitluntuxution.
Amongbotliesouice-iicleconomies
undsmullislunddevelopingstutes
tleieisgieutvuiiutioniniunkings
ontleeuseolpuyingtuxes(see
guie 1.4). Dilleiences in upplicuble
tuxiutesuccountloisomeoltle
vuiiution.Butsododilleiencesin
tleudministiutivebuiden.Among
iesouice-iicleconomiestleTTR
iungesliomuslowus11%ol
piot in Qutui to us ligl us 72% in
Algeiiu.Amongsmulleconomies
tleTTRuveiugesuiound38%.Tle
udministiutivebuidenolpuyingtuxes
vuiiesjustusdiumuticullybeing
smulloiobtuiningievenueliom
iesouicesdoesnotulwuysmuke
tuxutionudministiutivelyeusy.To
comply witl piot, consumption
undlubouituxescuntukeuslittleus
12louisuyeuiintleUnitedAiub
EmiiutesundS8inTleBulumus
undusmuclus424louisinSo
TomeundPiincipeund938inNigeiiu.
Alsoumongtletopten,HongKong
SAR(Clinu),Singupoie,Iielundund
Cunuduupplyulowtuxcost,witl
TTRsuveiuginglesstlun30%ol
piot. Tley ulso stund out loi tleii low
udministiutivebuidens.Tleylevyup
toninedilleienttuxesonbusinesses,
yetloiuloculbusinesstocomplywitl
tuxestukesonlyuboutoneduyumontl
und six puyments. Electionic ling und
puymentundjointloimsloimultiple
tuxesuiecommonpiucticeumongtlese
louieconomies.
Tunisiu,tleeconomytlutimpioved
tleeuseolpuyingtuxestlemostin
2009/10, lollowed tleii exumple. It
lullyimplementedelectionicpuyment
systemsloicoipoiuteincometuxund
vulueuddedtuxundbioudenedtleiiuse
to most ims. Tle clunges ieduced tle
numbeiolpuymentsuyeuiby14und
compliuncetimeby84louis.
Anotlei39economiesulsomudeit
eusieiloibusinessestopuytuxesin
2009/10.
9
Goveinmentscontinuedto
loweituxiutes,bioudentletuxbuse
undmukecompliunceeusieisousto
ieduce costs loi ims und encouiuge job
cieution.Asinpieviousyeuis,tlemost
popului meusuie wus to ieduce piot
tuxiutes.
Figure 1.4
Tax rates and administrative burdens are not necessarily lower in small or resource-rich
economies
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p
250
200
150
100
50
1000
800
600
400
200
Total Tax Rate and payments
Ranking on ease of paying taxes Payments (number per year) Total Tax Rate (% of profit)
*

Resource-rich economies analysed are those where scal revenues from hydrocarbons and minerals account for more
than 50% of the total (based on International Monetary Fund estimates).
9
This years report records all reforms with an impact on the paying taxes indicators between June 2009 and May 2010. Because the case study underlying the paying taxes indicators refers to
the nancial year ending 31 December 2009, reforms implemented between January 2010 and May 2010 are recorded in this years report, but the impact will be reected in the data in next
years report. See Appendix 3 for a summary of these reforms.
10 Paying Taxes 2011
What are the trends?
Intlepustsixyeuismoietlun60%ol
tleeconomiescoveiedbyuoingBusincss
mudepuyingtuxeseusieioiloweiedtle
tux buiden loi locul enteipiises (guie
1.S). Globully on uveiuge, ims spend
3Sduys(282louis)uyeuicomplying
witl30tuxpuyments.Acompuiison
witlglobuluveiugesin2004slowstlut
puymentsluvebeenieducedbyloui
und compliunce time by ve duys (39
louis).
10
Compuniesinligl-income
economiesluveiteusiest.Onuveiuge,
tleyspend22duys(172louis)on1S
tuxpuymentsuyeui.Businessesinlow-
incomeeconomiescontinuetolucetle
liglest udministiutive buiden (guie
1.6).Globullyonuveiuge,businessespuy
47.8% ol commeiciul piot in tuxes und
mundutoiycontiibutions,S.0peicentuge
pointslesstlunin2004.
Taxcompllancebecomlngeasler
EleveneconomiesinEusteinEuiope
und Centiul Asiu simplied tux puyment
intlesixyeuissince2004.Aveiuge
compliuncetimeloibusinesseslellby
twowoikingweeksusuiesult.Tle
momentumloiclungestuitedbuilding
inBulguiiuundLutviuin200Sundswept
uciosstleiegiontoAzeibuijun,Tuikey
undUzbekistunin2006,Beluiusund
Ukiuinein2007,tleKyigyzRepublic
undFYRMucedoniuin2008undAlbuniu
undMontenegioin2009.Buttle
udministiutivebuidengeneiullyiemuins
ligl.Fiveoltleiegionseconomiesiunk
umongtlosewitltleliglestnumbeiol
puyments globully (guie 1.7).
Figure 1.5
Tax reforms implemented by more than 60% of economies in the past six years
Figure 1.7
Who makes paying taxes easy and who does not-and where is the Total Tax Rate highest and lowest?
Payments (number per year)
Europe & Central Asia
(25 economies)
High income: OECD
(30 economies)
Sub-Saharan Africa
(46 economies)
Latin America & Caribbean
(32 economies)
East Asia & Pacific
(24 economies)
Middle East & North Africa
(18 economies)
South Asia
(8 economies)
58
40
40
24
23
18
8
DB 2006 DB 2007 DB 2008 DB 2009 DB 2010 DB 2011
Number of Doing Business reforms making it easier to pay taxes by Doing Business report year
Note: A Doing Business reform is counted as one reform per reforming economy per year. The data sample for DB2006 (2004)
includes 174 economies. The sample for DB2011 (2009) also includes The Bahamas, Bahrain, Brunei Darussalam, Cyprus,
Kosovo, Liberia, Luxembourg, Montenegro and Qatar, for a total of 183 economies.
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. See Appendix 1 for more details.
Figure 1.6
Administrative burden lowest in high-income economies
Income group
Payments
(number per year)
Time
(hours per year)
Total Tax Rate
(% of prot)
Low 38 295 71.0
Lower middle 33 359 40.3
Upper middle 31 272 43.4
High 15 172 38.8
Average 30 282 47.8
Fewest
Sweden 2
Hong Kong SAR, China 3
Maldives 3
Qatar 3
Norway 4
Singapore 5
Mexico 6
Timor-Leste 6
Kiribati 7
Mauritius 7
Most
Sri Lanka 62
Cte d'Ivoire 64
Nicaragua 64
Serbia 66
Venezuela, RB 70
Jamaica 72
Montenegro 77
Belarus 82
Romania 113
Ukraine 135
C|obu||yonuvctugc,
tmsspcndJ5duys
(2S2nouts)uycut
comp|yingwirnJ0rux
puymcnrsundpuy47.S%
o|commctciu|ptorin
ruxcsundmunduroty
conrtiburions.
10
The comparison of global averages refers to the 174 economies included in Doing Business 2006. Additional economies were added in subsequent years.
Paying Taxes 2011 11
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. See Appendix 1 for more
details.
Figure 1.7 continued
Fastest
Maldives 0
Bahrain 36
Qatar 36
Bahamas, The 58
Luxembourg 59
Oman 62
Switzerland 63
Ireland 76
Seychelles 76
Slowest
Ukraine 657
Senegal 666
Mauritania 696
Chad 732
Belarus 798
Venezuela, RB 864
Nigeria 938
Vietnam 941
Bolivia 1,080
Brazil 2,600
Total Tax Rate (% of prot)
Lowest
Timor-Leste 0.2
Vanuatu 8.4
Maldives 9.3
Namibia 9.6
Macedonia, FYR 10.6
Qatar 11.3
United Arab Emirates 14.1
Saudi Arabia 14.5
Bahrain 15.0
Georgia 15.3
Highest
Eritrea 84.5
Tajikistan 86.0
Uzbekistan 95.6
Argentina 108.2
Burundi 153.4
Central African Republic 203.8
Comoros 217.9
Sierra Leone 235.6
Gambia, The 292.3
Congo, Dem. Rep. 339.7
SomeSub-SuluiunAliicuneconomies
ulsolocusedoneusingtuxcompliunce.
In2010SieiiuLeoneintioduced
udministiutiveieloimsuttletux
uutloiityundieplucedlouidilleient
sulestuxeswitluvulueuddedtux.
SevenotleieconomiesBuikinu
Fuso,Cumeioon,CupeVeide,Glunu,
Muduguscui,SoutlAliicuundSudun
ieducedtlenumbeiolpuyments
byeliminuting,meigingoiieducing
tle liequency ol lings und puyments.
Mozumbique,SoTomeundPiincipe,
SieiiuLeone,SudunundZumbiu
ievumpedexistingtuxcodesoienucted
newonesintlepustsixyeuis.
FiimsinOECDligl-incomeeconomies
luvetlelowestudministiutivebuiden.
Businessesintleseeconomiesspend
onuveiuge2Sduysuyeuicomplying
witl14tuxpuyments.Allbuttwo,tle
SlovukRepublicundSwitzeilund,luve
lully implemented electionic ling
und puyment loi ims. Between 2006
und2009tleCzeclRepublic,Finlund,
Gieece,tleNetleilunds,Polundund
Spuinmundutedoienluncedelectionic
ling oi simplied tle piocess ol puying
tuxes,ieducingcompliuncetimeby13
duys(101louis)onuveiuge.
IntleMiddleEustundNoitlAliicu,
businessesmustcomplywitlonly22
puymentsuyeuionuveiuge,tlesecond
lowestumongiegions.Yettleieisgieut
vuiiution,witlupto44puymentsintle
RepublicolYemenunduslewustliee
puyments in Qutui. In 2009/10 only two
tuxieloimsweieiecoided,inJoidun
undTunisiu.
InLutinAmeiicuundtleCuiibbeun
ims continue to spend substuntiul
timepuyingtuxes38Slouisuyeui
onuveiuge.Tleyluvetomukeun
uveiuge ol 33 puyments u yeui (guie
1.8).Tlunklully,munyeconomiesin
tle iegion luve simplied tle piocess
olpuyingtuxessince2004,suving
businessesunuveiugeoltlieeduys
uyeui.Still,only12oltleiegions
32 economies ollei electionic ling
und puyment loi ims. Colombiu,
tleDominicunRepublic,Guutemulu,
Honduius,MexicoundPeiuluve
intioduced online ling und puyment
systemssince2004,eliminutingtle
needloi2Ssepuiutetuxpuymentsuyeui
undieducingcompliuncetimeby11
duys(83louis)onuveiuge.Tleboldest
meusuies:since2004Colombiulus
ieducedtlenumbeiolpuymentsby49
undcompliuncetimeby248louis,tle
DominicunRepublicluscutpuymentsby
6Sundtimeby1S6louis,undMexico
lusieducedtlenumbeiolpuyments
by21undtletimetocomplywitltlem
by148louis.Andtleseeconomies
continuewoiktoluitleiieducetle
udministiutive buiden loi ims.
Economies in Eust Asiu und tle Pucic
luveieducedcompliuncetimesince
2004byubouteigltbusinessduys,
tlemostulteiEusteinEuiopeund
CentiulAsiu.Mostiecently,LuoPDR
consoliduted tle lings loi business
tuinoveituxundexcisetuxuswellus
peisonulincometuxwitlloldinginu
singletuxietuin.Businessesnowspend
2Sleweiduysuyeuicomplyingwitl
tux luws. Clinu unied uccounting
metlodsundexpundedtleuseol
electionic tux ling und puyment systems
in 2007, suving ims 368 louis und
26puymentsuyeui.In2008und2009
Clinu unied ciiteiiu loi coipoiute
incometuxdeductionundsliltedliomu
pioduction-oiientedvulueuddedsystem
touconsumption-oiientedone,suving
ims unotlei 106 louis u yeui. Biunei
Duiussulum,Muluysiu,Tuiwun(Clinu)
undTluilundintioducedoienlunced
electionicsystemsintlepustsixyeuis.
Figure 1.8
Paying taxes easier in East Asia and the Pacic Regional averages in paying taxes
Payments (number per year)
High income: OECD
East Asia & Pacific
South Asia
Sub-Saharan Africa
DB 2011 DB 2006 2009 Global average (30)
14 17
22 24
25 28
31 31
33 40
37 38
42 50
High income: OECD
East Asia & Pacific
South Asia
Sub-Saharan Africa
DB 2011 DB 2006 2009 Global average (282)
199 237
194 223
218 291
283 305
385 411
315 343
314 431
InSoutlAsiupuymentsundcompliunce
time clunged little oveiull. In 2009/10
uoingBusincssiecoidedonlyonetux
ieloim,inIndiu,wliclubolisled
liinge benet tux und enlunced
electionicling.
TTRsbecomlnglower
Wlenconsideiingtlebuidenoltuxes
onbusiness,itisimpoitunttolookut
ulltletuxestlutcompuniespuy.Tlese
muyincludelubouituxesundmundutoiy
contiibutionspuidbyemployeis,sules
tux,piopeitytuxundotleismullei
tuxessucluspiopeitytiunsleitux,
dividend tux, cupitul guins tux, nunciul
tiunsuctionstux,wustecollectiontuxund
velicleundioudtux.Inseveneconomies
uioundtlewoild,tuxesundmundutoiy
contiibutionsudduptomoietlun
100% ol piot, iunging liom 108.2%
to 339.7% (guie 1.7). uoingBusincss
ussumes tlut tle stunduid im in its tux
cuse study lus u xed gioss piot muigin
ol20%.Wleietleindictoislowstlut
tuxes exceed piot, tle compuny lus to
euin u gioss piot muigin in excess ol
20%topuyitstuxes.Coipoiuteincome
tuxisonlyoneolmunytuxeswitlwlicl
tlecompunylustocomply.TleTTR
loimosteconomiesisbetween30%und
S0% ol piot.
EconomiesinEusteinEuiopeund
CentiulAsiuluveimplementedtle
mostieloimsullectingtlepuyingtuxes
indicutoissince2004,witl23oltle
iegions2SeconomiesimplementingS8
suclieloims.Tlemostpopuluileutuie
in tle pust six yeuis wus loweiing piot
tuxiutes(doneby19economies).Tle
clungesieducedtleuveiugeTTRin
tleiegionby13.1peicentugepoints
(guie1.9).
Intlepustyeui,economiesinSub-
SuluiunAliicuimplementeduquuitei
olullieloimsullectingtlepuying
tuxesindicutois,uiecoidloitleiegion
compuiedwitlpieviousyeuis.Intle
pustsixyeuistlemostpopuluileutuiein
tle iegion wus ieducing piot tux iutes
(28ieloims).Tleieductionsloweied
tleuveiugeTTRloitleiegionby2.7
peicentuge points. But piot tux, just one
olmunytuxesloibusinessesinAliicu,
uccountsloionlyutliidoltletotultux
puid.Fiimsintleiegionstilllucetle
liglestuveiugeTTRintlewoild,68%
ol piot.
Figure 1.9
Eastern Europe and Central Asia has biggest reduction in Total Tax Rate Total Tax Rate (% of prot)
East Asia & Pacific
South Asia
High income: OECD
Sub-Saharan Africa
Profit tax Labour tax Other Total Tax Rate reduction 2004-09 DB 2006 Total Tax Rate
DB 2011 Total Tax Rate reduction 2004-09
DB 2006 Total Tax Rate
Total Tax Rate (% of profit)
13.2%
14.9%
3.6%
4.4%
2.3%
3.2%
0.4%
FiimsinOECDligl-incomeeconomies
puy 43.0% ol piot in tuxes on uveiuge.
Nineteenoltleseeconomiesloweied
piot tux iutes in tle pust six yeuis.
Andmoieclungesuieontleloiizon.
Austiuliu,FinlundundtleUnited
Kingdomluveunnouncedmujoi
ieloimsoltleiituxsystemsintlenext
lewyeuis.
11
TleuveiugeTTRintleMiddleEust
und Noitl Aliicu, ut 32.8% ol piot, is
umongtlelowestintlewoildtlunks
inpuittotuxieloimsieducingitby10.8
peicentugepointssince2004.Algeiiu,
Djibouti,Egypt,Moiocco,Syiiu,Tunisiu,
WestBunkundGuzuundtleRepublic
ol Yemen luve ull loweied piot tux
iutes,ubolisledtuxesoiiepluced
cuscudingtuxes.
TleuveiugeTTRloiLutinAmeiicuund
tleCuiibbeunistlesecondliglest,
umounting to 48% ol piot. Seven
economies,includingMexico,Puiuguuy
undUiuguuy,ieducedtuxiutesintle
pustsixyeuis,loweiingtleiegionsTTR
by2.3peicentugepoints.
11
Australia intends to reduce the corporate income tax rate from 30% to 29% from 1 July 2013, and then to 28% from 1 July 2014. In Finland an initial proposal includes reducing the corporate
income tax rate from 26% to 22% and increasing the standard value added tax rate of 22% by two percentage points. In the United Kingdom the emergency budget for 201011 calls for
reducing the corporation tax rate to 27% for the 2011 nancial year and then, through cuts over the next four years, to 24%. It also calls for reducing the small company tax rate to 20% and
increasing the standard value added tax rate from 17.5% to 20%.
Tle TTR in Eust Asiu und tle Pucic
is ielutively low. At 3S.4% ol piot, it
istlesecondlowestulteitlutintle
MiddleEustundNoitlAliicu.Still,13
economies in tle iegion ieduced piot
tuxiutesintlepustsixyeuis,including
Clinu,Indonesiu,Muluysiu,tle
Plilippines,TluilundundVietnum.
FeweconomiesinSoutlAsiuluve
mudeclungesullectingtlepuyingtuxes
indicutoissince2004.Alglunistun,
Bungludesl,IndiuundPukistunieduced
piot tux iutes, but tle ieductions lud
littleellectoniegionsuveiugeTTR.
What has worked?
Woildwide,economiestlutmukepuying
tuxes eusy loi domestic ims typicully
ollei electionic systems loi tux ling
undpuyment,luveonetuxpeituxbuse
und use u ling system bused on sell-
ussessment (guie 1.10). Tley ulso locus
onloweituxiutesuccompuniedbywidei
tuxbuses.
OIIerlnganelectronlcoptlon
Electionic ling und puyment ol tuxes
eliminutesexcessivepupeiwoikund
inteiuction witl tux olceis. Olleied by
61economies,tlisoptioncunieduce
tletimebusinessesspendincomplying
witltuxluws,incieusetuxcompliunce
undieducetlecostolievenue
udministiution.Buttlisispossibleonly
witlellectiveimplementution.Simple
piocessesundligl-quulitysecuiity
systemsuieneeded.
InTunisiu,tlunkstounowlully
implemented electionic ling und
puymentsystem,businessesspend37%
lesstimecomplyingwitlcoipoiute
incometuxundvulueuddedtux.
Azeibuijunintioducedelectionicsystems
undonlinepuymentloivulueudded
tuxin2007undexpundedtlemto
piopeityundlundtuxesin2009.Beluius
enlunced electionic ling und puyment
systems,ieducingtlecompliuncetime
loivulueuddedtux,coipoiuteincome
tuxundlubouituxesby14duys.Tle
ieveiseluppenedinUgundu.Tleie,
compliuncetimelusincieuseddespite
tleintioductionolunelectionicsystem.
Onlineloimsweiesimplytoocomplex.
Keeplngltslmple:onetaxbase,
onetax
Multipletuxutionwleietlesume
tuxbuseissubjecttomoietlunone
tux tieutment mukes elcient tux
munugementclullenging.Itincieuses
ims cost ol doing business us well
ustlegoveinmentscostolievenue
udministiutionundiisksdumuging
investoi condence.
Filtyeconomiesluveonetuxpei
tuxbuse.Huvingmoietypesoltuxes
iequiiesmoieinteiuctionbetween
businessesundtuxugencies.InNigeiiu
coipoiuteincometux,educutiontux
undinloimutionteclnologytuxuieull
leviedonucompunystuxubleincome.
InNewYoikCitytuxesuieleviedut
tlemunicipul,stuteundledeiullevels.
Euclisculculutedonudilleienttux
buse,sobusinessesmustdotliee
dilleientculculutions.
Figure 1.10
Good practices around the world in making it easy to pay taxes
Practice Economies* Examples
Allowing self-assessment 136 Botswana, Georgia, India, Malaysia, Oman, Peru,
United Kingdom
Allowing electronic ling
and payment
61 Australia, Dominican Republic, India, Lithuania,
Singapore, South Africa, Tunisia
Having one tax per tax base 50 Afghanistan, Hong Kong SAR (China), FYR Macedonia,
Morocco, Namibia, Paraguay, Sweden
Wot|dwidc,cconomics
rnurmulcpuyingruxcs
cusy|otdomcsrictms
rypicu||yo||ctc|ccrtonic
sysrcms|otrux|ingund
puymcnr,nuvconcrux
pctruxbuscunduscu
|ingsysrcmbuscdon
sc||-usscssmcnr.Tncy
u|so|ocuson|owctrux
turcsuccompunicdby
widctruxbuscs.
*Among 183 economies surveyed
Figure 1.11
Major cuts in corporate income tax rates in 2009/10
Region Reduction in corporate income tax rate (%) Year effective
Sub-Saharan Africa Burkina Faso from 30 to 27.5 2010
Republic of Congo from 38 to 36 2010
Madagascar from 25 to 23 2010
Niger from 35 to 30 2010
So Tom and Principe from 30 to 25 2009
Seychelles from progressive 040 to 2533 2010
Zimbabwe from 30 to 25 2010
Eastern Europe
& Central Asia
Azerbaijan from 22 to 20 2010
Lithuania from 20 to 15 2010
FYR Macedonia from 10 to 0 (for undistributed prots) 2009
Tajikistan from 25 to 15 2009
East Asia & Pacic Brunei Darussalam from 23.5 to 22 2010
Indonesia from 28 to 25 2009
Taiwan (China) from 25 to 17 2010
Tonga from progressive 1530 to 25 2009
Latin America & Caribbean Panama from 30 to 25 2010
Figure 1.12
Who made paying taxes easier and lowered the tax burden in 2009/10 and what did they do?
Feature Economies Some highlights
Easing
compliance
Merged or
eliminated taxes
other than prot tax
Belarus, Bosnia and Herzegovina,
Burkina Faso, Cape Verde, Hong
Kong SAR (China), Hungary, India,
Jordan, Montenegro, Slovenia,
Repblica Bolivariana de Venezuela
Cape Verde eliminated all
stamp duties.
Simplied tax
compliance
process
Azerbaijan, Belarus, Canada,
China, Czech Republic, FYR
Macedonia, Montenegro,
Netherlands, Sierra Leone, Taiwan
(China), Ukraine, Zimbabwe
The Netherlands made value
added tax lings and payments
quarterly and eased prot tax
calculations. Belarus changed
from monthly to quarterly
payments for several taxes.
Introduced
or enhanced
electronic systems
Albania, Azerbaijan, Belarus, Brunei
Darussalam, India, Jordan, Tunisia,
Ukraine
A big increase in online ling
in Azerbaijan reduced the time
for ling and the number of
payments.
Reducing
tax rates
Reduced prot
tax rate by two
percentage points
or more
Azerbaijan, Brunei Darussalam,
Burkina Faso, Republic of
Congo, Indonesia, Lithuania,
FYR Macedonia, Madagascar,
Niger, Panama, So Tom and
Principe, Seychelles, Taiwan
(China), Tajikistan, Thailand, Tonga,
Zimbabwe
Burkina Faso reduced the prot
tax rate from 30% to 27.5%
and merged 3 taxes. Niger
lowered the rate from 35% to
30%. Lithuania reversed an
increase (from 15% to 20%)
made the previous year.
Reduced
labour taxes
and mandatory
contributions
Albania, Bosnia and Herzegovina,
Bulgaria, Canada, Hungary,
Moldova, Portugal
Hungary reduced employers'
social security contribution rate
from 29% of gross salaries to
26%.
Introducing
new
systems
Introduced new
or substantially
revised tax law
Azerbaijan, Belarus, Hungary,
Jordan, Panama, Portugal, So
Tom and Principe
Jordans new tax law abolished
certain taxes and reduced
rates.
Introduced change
in cascading
sales tax
Burundi, Lao PDR, Sierra Leone Burundi introduced a value
added tax in place of its
transactions tax.
TlisisnolongeitlecuseinOntuiio.
TleCunudiunpiovinceluimonised
itscoipoiuteincometuxbusewitltle
ledeiulone.AndtleCunuduRevenue
AgencynowudministeisOntuiios
coipoiutecupitultuxundcoipoiute
minimumtux.Stuitingwitltle2009tux
yeui,Ontuiiobusinessesluvebeenuble
to muke combined puyments und le u
singlecoipoiutetuxietuin.
Biuzilulsouimstosimplilyusystem
tlutiequiiesbusinessestointeiuct
witltlieelevelsolgoveinment.In
2010itintioducedunewsystemol
digitulbookkeeping(SistemuPublico
deEsciituiuoDigituloi,oiSPED)to
integiuteledeiul,stuteundmunicipultux
ugencies.Tlesuccesslulimplementution
olSPEDwilleusetleudministiutive
buidenolcomplyingwitltuxesinBiuzil
byieducingtlenumbeioltuxpuyments
undpossiblytletimeloicompliunce.
Trustlngthetaxpayer
Voluntuiycompliunceundsell-
ussessmentluvebecomeupopuluiwuy
to elciently udministei u countiys tux
system.Tuxpuyeisuieexpectedund
tiustedtodeteiminetleiiownliubility
undeitleluwundpuytlecoiiect
umount.Witlligliutesolvoluntuiy
compliunce,udministiutivecostsuie
muclloweiundsoistlebuidenol
compliunceuctions.
12
Sell-ussessment
systemsulsoieducetlediscietionuiy
poweis ol tux olciuls und oppoitunities
loicoiiuption.
13
Tobeellective,
lowevei,sell-ussessmentneedstobe
piopeilyintioducedundimplemented,
witltiunspuientiules,penulties
loinoncompliunceundestublisled
uuditpiocesses.
Oltle183economiescoveiedbyuoing
Busincss, 74% ullow ims to culculute
tleii own tux bills und le tle ietuins.
TleseincludeulleconomiesinEustein
EuiopeundCentiulAsiuundulmost
two-tliids in Eust Asiu und tle Pucic,
tleMiddleEustundNoitlAliicuund
SoutlAsiu.Botltuxpuyeisundievenue
uutloiities cun benet. Muluysiu
sliltedtousell-ussessmentsystemloi
businessesinstugesstuitingin2001.
Tuxpuyeicompliunceincieused,undso
didievenuecollection.
14

12
Ricard (2008).
13
Imam and Davina (2007).
14
bin Haji Ridzuan (2006).
Some of the results
FiunklinD.Rooseveltoncesuid,Tuxes,
ulteiull,uietleduestlutwepuyloitle
piivilegesolmembeislipinunoigunised
society.
1S
Tleieisnodoubtubouttle
need loi und benets ol tuxution. But
loweconomiesuppioucltuxution
loismullundmedium-sizebusinesses
vuiiessubstuntiully.Onelundiedund
lteen economies mude tleii business
tux systems moie elcient und ellective
intlepustsixyeuisundluveseen
concieteiesults.
Easlerprocess,morerevenue
Colombiuintioducedunewelectionic
system, PILA, tlut unied in one online
puymentullcontiibutionstosociul
secuiity,tlewelluiesecuiitysystemund
lubouiiiskinsuiunce.Itsusebecume
mundutoiyloiullcompuniesin2007.
By2008tlenumbeiolcompunies
iegisteiedtopuycontiibutionstliougl
PILAludincieusedbySS%.Tlesociul
secuiitycontiibutionscollectedtlutyeui
liomsmullundmedium-sizecompunies
ioseby42%,toSS0billionpesos.
Muuiitiusimplementedumujoi
tuxieloimin2006.Itieducedtle
coipoiuteincometuxiuteliom2S%
to1S%undiemovedexemptionsund
industiy-specic ullowunces, sucl us its
investmentullowunceundtuxloliduys
loimunuluctuiing.Autloiitiesuimed
toincieuseievenuebycombiningu
lowtuxiute,utiunspuientsystem,
uieinloicedtuxudministiutionund
elcient collection und tley did. In tle
2007/08 scul yeui coipoiute income tux
ievenue giew by 27%, und in 2008/09 it
incieusedby6S%.
FYRMucedoniulusimplemented
mujoituxieloimsloitlepustseveiul
yeuisinuiow.In2007itintioducedu
newelectionictuxseivice.In2008it
umended tle tux luw to cut tle piot
tuxiuteliom1S%to10%.In2009it
implementedunew,cleuieiLuwon
ContiibutionsloiMundutoiySociul
Secuiityundimposedtlecoipoiute
income tux only on distiibuted piots.
Despitetleglobuldowntuin,tle
numbeiolcompuniesiegisteiedus
tuxpuyeisinFYRMucedoniuincieused
by16%between2008und2009.
Inunelloittostimuluteeconomic
giowtlundcieuteumoiebusiness-
liiendlyenviionment,Koieuieduced
tlecoipoiuteincometuxiuteliom2S%
to22%in2009undplunstoieduce
itevenluitleiinlutuieyeuis.Tle
ievenuecollectedbytlegoveinmentin
2009didnotlull.Insteud,tlenumbei
olcompuniesiegisteiedloicoipoiute
incometuxincieusedby7%undtle
coipoiuteincometuxievenueby11%.
ThevalueIorbuslness
Tleseiesultsillustiutesomeoltle
benets ol moie ellective tux systems
unduppiopiiutetuxiutes.Recent
ieseuicllusloundtlutindeveloping
economies, wleie muny ims uie
likelytobesmullundleuvilyinvolved
in inloimul uctivity, ieducing piot
tuxiuteslelpsieduceinloimulityund
iuisetuxcompliunce,incieusinggiowtl
undievenue.
16
Figure 1.13
Size of informal sector is associated with ease
of paying taxes
Least difficult
Economies ranked by ease of paying taxes, quintiles
High
Informal sector share of GDP
Low
Most difficult
Note: Relationships are signicant at the 1% level and remain
signicant when controlling for income per capita.
Source: Doing Business database; Schneider and
Buehn (2009).
15
Address delivered at Worcester, Mass., October 21, 1936. John T. Woolley and Gerhard Peters, The American Presidency
Project, http://www.presidency.ucsb.edu/.
16
Hibbs and Piculescu (2010).
Tlesizeoltleinloimulsectoi,wliclin
munydevelopingeconomiesuccountsloi
us mucl us lull ol GDP, cun signicuntly
ullecttletuxievenuecollectedusu
peicentugeolGDP.
17
Buttleieveiseisulsotiue:tlestiuctuie
oltletuxsystemundtlepeiceptionol
tlequulityolgoveinmentseivicescun
ullecttlesizeoltleinloimulsectoiinu
countiy.Luigeiinloimulsectoisuswell
usgieuteicoiiuptionuieloundwleie
tle mujoiity ol ims peiceive tuxes us
notwoitlpuyingbecuuseollow-quulity
publicgoodsundpooiinliustiuctuie.
Tlisviewissuppoitedbyuiecent
suiveyolbusinessundluwstudentsin
Guutemulu.Mostpuiticipuntsbelieved
tluttuxevusionwusetliculwleietux
systemsuieunluiioicoiiuptundwleie
goveinmentcommitslumuniiglts
ubuses.
18
uoingBusincssdutuslowtlut
economies wleie it is moie dilcult und
costlytopuytuxesluveluigeisluiesol
inloimul sectoi uctivity (guie 1.13).
Sensitivitytotuxieloimsisullectedby
im size. Luige ims uie usuully moie
diiectlyullectedbyclunges.Butsmull
ims luve u liglei tendency to be
uniegisteiediltuxiutesuieligl,und
tendtoundei-iepoitincomeundsize
il liglei incomes und biggei ims uie
tuxedutuligleiiute.
19
InCtedIvoiie,
wleie ims must puy 44% ol piot und
mukemoietlun64puymentsuyeuito
complywitl14dilleienttuxes,uiecent
study nds tlut ims uvoid giowing in
oideitopuylesstux.
20
Figure 1.14
Total Tax Rates between 30% and 50% are most common
17
Gordon and Li (2009).
18
McGee and Lingle (2008).
19
OECD (2008).
20
Klapper and Richmond (2010).
<10%
10s
20s
30s
40s
50s
60s
70s
80s
90s
100 +
T
o
t
a
l

T
a
x

R
a
t
e

(
%

o
f

p
r
o
f
i
t
)
Low and lower middle income Upper middle and high income
0 10 20 30 40 50
Number of economies by income group
A fair, stable and
sustainable tax system
the challenge for governments
in the wake of the global
economic downturn.
APwCcommentuiyontleiesults
Puyingtuxisimpoitunt.Tuxespiovide
goveinmentievenuesundtlosewlo
puytlemluveustukeintlesystemund
inlowgoveinmentspendsitsmoney.
Tuxesuieulilebloodolustubleund
piospeioussociety.Intlewoidsol
OliveiWendellHolmes,USSupieme
CouitolJustice,in1904,Tuxesuietle
piiceyoupuyloicivilisution.
Butlevyingtuxesisnotuneusytuskloi
goveinment,especiullyintlewukeol
uglobuleconomicdowntuin.Witlbig
stiuctuiul decits, puiticuluily in tle
luige developed economies, scul policy
lusneveibeenundeisomuclpublic
sciutinyusitistoduy.Tleieisucleui
expectutiontlutgoveinmentsinmuny
economieswillneedtoiuisetuxesus
wellusmukespendingcuts.Buttley
willneedtoiemuincuutiousinlowtley
iuisetuxestoensuietlutiecoveiyisnot
stied und tlut tle tux system suppoits
businessinvestment,economicgiowtl
undsociulwell-being.Higleituxes
slould ow tliougl to u stuble business
enviionment,goodinliustiuctuieund
betteiquulityollileloicitizens.
Asuiesultoltledowntuin,tlelocuson
tleioletluttuxcunpluyininteinutionul
developmentlusincieused.Witl
cutsinuidbudgets,itiscleuitluttux
ievenuesuieumoiesustuinublesouice
ol nuncing loi developing countiies
tlundebtoiuid.Buttleieuiemuny
clullengestotuckleinincieusingtux
ievenuesindevelopingcountiies,
including combuting cupitul iglt liom
tlesecountiies,ieducingtlesizeoltleii
inloimuleconomiesundlelpingtleii
tuxuutloiitiestomonitoicompliunce
undcollecttletuxesdue.TlePuying
Tuxesstudyiesultsslowtluttuxiutes
tendtobeligleiundtlecompliunce
buidenleuvieiintledevelopingwoild.
Reducingtuxiutes,bioudeningtle
buseundmukingiteusytopuy,cunbe
impoituntinencouiugingloculbusiness
toiegisteiundpuytux.
TlePuyingTuxesstudylooksuttux
systemsliomtlebusinesspeispective.
Businesspluysunessentiuliolein
contiibutingtoeconomicgiowtlund
piospeiitybyemployingwoikeis,
impiovingtleskillsundknowledge
buse,buyingliomloculsupplieisund
piovidingulloidublepioductstlut
impiovepeopleslives.Businessulso
puysundgeneiutesmunytuxes.Aswell
us coipoiute income tux on piots,
tleseincludeemploymenttuxes,
sociulcontiibutions,indiiecttuxesund
piopeitytuxes.Tleieloie,tleimpuct
tluttuxsystemsluveonbusiness
isimpoitunt.
Chapter2:PwCcommentuiy
TlisistlesixtlyeuioltlePuying
Tuxesstudy.Tliouglouttleseyeuis,
tuxieloimlusbeenliglontleugendu
olgoveinmentsuioundtlewoild.Tle
WoildBunkundIFCluveslowntlut
11Soltle183economiesintlestudy
mude signicunt tux ieloims to muke
puyingtuxeseusieiduiingtlistime,und
tleiuteolclungelusnotlessenedsince
tledowntuin.Foityeconomiesmude
signicunt ieloims in tle lust yeui. Tle
mostpopuluiieloimcontinuestobe
ieducingtlestututoiyiuteolcoipoiute
income tux und tlis lus owed tliougl
touloweituxcost.Tleielusulsobeen
ulocusoneusingtlecompliuncebuiden
undmukingiteusieitopuytuxes.Tle
PuyingTuxesiesultsslowtlutdilleient
udministiutivepiucticesusedby
goveinmentpluyukeyioleinloweiing
oiincieusingtlecompliuncebuiden.We
continuetosuggesttluttlisuieuslould
ieceiveevenmoieuttentionintlelutuie
us moie elcient tux collection benets
botlgoveinmentundbusiness.
Why the Paying Taxes study
is important
PuyingTuxesusesudomesticmedium-
sizecusestudycompunytomeusuie
tleimpuctonbusinessoltuxsystems
uioundtlewoild.Tlepuiposeisto
piovidequuntitutivedututostimulute
undinloimdiscussionontuxpolicyund
tuxudministiutionundtoinspiietux
ieloim.TlePuyingTuxesiesultsenuble
goveinmentstobenclmuiktleiitux
systemwitlotleisonulike-loi-likebusis
undtoidentilybestpiuctices.
Tleuseolucusestudycompunywitl
ustunduidluctputteinbiingssome
limitutions.Tlesizeoltlecompunymuy
beconsideiedluigeiinsomeeconomies,
undmodestinotleis.Tliscouldullect
lowitistuxedineconomieswitlspeciul
iegimesloismullundmedium-sized
enteipiises.Tlelocutionoltlecompuny
isintlemostpopulouscitywlicltends
tobeexpensiveliomutuxpeispective.
Tletypeolbusinessmuyluveunimpuct
usudditionultuxesoiincentivesuie
olten uvuiluble loi specied uctivities.
Also,tlelucttlutPuyingTuxes
uddiessesonlyceituinuspectsoltux
udministiutionundnototleis
(e.g.tleuppioucloltletuxuutloiity)
couldbeconsideiedlimiting.
40
economiesmude
signicunt ieloims
intlelustyeui
115oltle1B3
economiesin
tlestudymude
signicunt tux
ieloimstomuke
puyingtuxes
eusieiduiing
tlelustsixyeuis
TncPuyingTuxcs
tcsu|rssnowrnur
di||ctcnrudminisrturivc
ptucriccsuscdby
govctnmcnrp|uyu
lcyto|cin|owcting
otinctcusingrnc
comp|iunccbutdcn
Tlisstudyisuniqueloiunumbeiol
ieusonsincludingtleluigenumbei
oleconomiesincluded,tlebieudtl
oltletuxescoveied,tlebusiness
peispective,undtleiiclnessoltle
bunkoldutupioduced.Twoiecently
publisledieseuiclpupeisillustiute
tleiiclnessoltledutu.Apupei
culled,Tleellectolcoipoiutetuxes
oninvestmentundentiepieneuislip
21
,
publisledintleAmeiicunEconomic
Jouinulusesdutuliomtlestudyto
slowtleimpuctolligleicoipoiute
incometuxiutesonbusinessstuit-up
undinvestment.AndPwCsiepoit,
TleimpuctolVATcompliunceon
business
22
,slowslowudministiutive
piucticesintleeconomieswitluvulue
uddedsulestuxsystemullectstleVAT
compliuncebuiden.
TlePuyingTuxesstudymeusuiestliee
sepuiuteuspectsolpuyingtuxes.Two
oltleseielutetotletuxcompliunce
buidenundonetotletuxcost.Alltliee
uieequullyweigltedtouiiiveutun
oveiulliunking.Itisimpoitunttolook
uteuclsub-indicutoisepuiutely,useucl
meusuiesudilleientuspectoltletux
system, geneiuting impoitunt ndings
tlutuienotnecessuiilyieveuledintle
oveiulliunking.Inuddition,tleiemuy
benocoiielutionbetweentleiesultsloi
euclsub-indicutoi.Foiexumple,Sweden
isuneconomywlicllusuliglTTR
iunking(146),butulowiunkingloitle
timetocomply(30).Tuxesuieliglin
Sweden,piovidingloiliglquulitysociul
seivicesundugoodstunduidolliving
loicitizens.Butitiseusytopuytuxesin
Swedeniesultinginlesscompliuncetime
und ulso lewei tuxpuyments.
TlePuyingTuxesstudygivesuiunking
toeucleconomy,botlloitleoveiull
euseolpuyingtuxesundloieucl
sub-indicutoi.Tlisisuselulbecuuse
itenubleseucleconomytoseewleie
itstundswitlinitspeeigioup.But,
wesuggesttlutitismostimpoituntto
undeistundtledutubelindtleiunking
loieucleconomybylookingutitsuctuul
iesultsundwlutdiivestlem.Inoui
expeiience,tlisistlemostvuluubleuse
oltlestudyiesults.Itisulsoimpoitunt
toiecognisetluttleeconomieswitltle
topglobuliunkingsuienotnecessuiily
tlebestmodelsloiwlutmigltbe
consideiedtobeugoodtuxsystem.In
PuyingTuxcs2011, tleie uie ve oil-iicl
stutesintletoptenwlicliuisetleii
ievenuesliomtlesenutuiuliesouices,
uswellususmullislundstutewlicl
does not tux tle piots ol tle cuse study
compuny.ButtleotleisincludeuG20
economy(Cunudu)undtlieeeconomies
wliclluvesuccesslullylollowedu
policyollowcoipoiutetuxestostimulute
businessinvestment(HongKong,
SingupoieundIielund).Ouiexpeiience
istlutgoveinmentsusetlePuying
Tuxesiesultstobenclmuiktleiitux
systemsuguinstneiglbouiingcountiies,
oitleiieconomicpeeis.Foiexumple,
Itulymigltbenclmuikpiimuiilyucioss
tleEUcountiiesundBiuziluguinstits
neiglbouis,includingAigentinu,Clile,
PeiuundBoliviu.Tlissectionoltle
studytleieloieexploiestleiesultsliom
unumbeioldilleientiegionul,economic
undincomegioupingstoslowlowtle
dutucunbepiesentedinwuyswlicl
muybeconsideiedolmostielevunce.
TncPuyingTuxcssrudy
mcusutcsrntccscputurc
uspccrso|puyingruxcs.
Twoo|rncsctc|urcrornc
ruxcomp|iunccbutdcn
undoncrorncruxcosr
21
The Effect of Corporate Taxes on Investment and Entrepreneurship by Simeon Djankov, Tim Ganser, Caralee McLeish, Rita
Ramalho and Andrei Shleifer American Economic Journal:Macroeconomics 2 (July) 2010:31-64
22
The impact of VAT compliance on business by Susan Symons, Neville Howlett, Katia Ramirez Alcantara of PwC UK
September 2010 - http://www.pwc.co.uk/pdf/PwC_VAT_Compliance_survey_2010.pdf
AlteilustyeuisPuyingTuxesluuncl
inKuuluLumpui,tlelocusgiouploi
PuyingTuxesmetwitliepiesentutives
liomtleWoildBunk,IFCundPwCto
discusstlemetlodology.Tleplunned
intioductionolunewGoodsund
SeivicesTuxwusulsodiscussed,noting
tluttlewuyinwliclitsintioduced
couldluvemujoiimplicutionsloitle
compliuncebuidenonbusiness.Tle
messuge?Keepitsimple.Seepuge6Sloi
luitleidiscussionollowtleiesultsuie
beingusedinMuluysiu.
TleCzeclRepublicisunotleigood
exumplewliclslowslowPuyingTuxes
lusencouiugeddebuteuioundtux
ieloimundiesultedinconcieteuctions
beingtuken.TleDeputyMinisteiol
Finunce,MiPeteiClienko,tookpuitin
tlePuyingTuxesluunclinPiuguelust
yeui.HespokeuboutlowPuyingTuxes
isusedbygoveinmenttobenclmuik
tleiituxsystemuguinstotleisinCentiul
Euiopeundelsewleietolelpidentily
uselulclunge(seepuge60).Anewtux
udministiutionuctwillcomeintoloicein
tleCzeclRepublicon1Junuuiy2011.
EveiyyeuitlePuyingTuxesiesults
geneiutegieutinteiestunduiediscussed
witlgoveinments,businessundotlei
stukeloldeisuioundtlewoild.In
Cluptei3,wepiovideleedbuckliomu
numbeiolcountiiesslowinglowtle
iesultsuiebeingused.Foiexumple,in
Muluysiuin2007,uspeciultuskloice
culledPEMUDAHwusestublisled,
iepoitingdiiectlytotlePiimeMinistei,
tolookutulltleWoildBunkuoing
Busincssindicutois.Tlistuskloice
ismudeupolindividuulsliombotl
tlepiivuteundpublicsectoisund
compiiseslocusgioupsiesponsible
loieucloltleindicutois.Tley
lookutpiocessesundpioceduiesto
impiovetlewuygoveinmentiegulutes
businesswitluviewtoimpiovingtle
businessenviionment,competitiveness
undelciency.
FvctyycutrncPuying
Tuxcstcsu|rsgcncturc
gtcurinrctcsrund
utcdiscusscdwirn
govctnmcnrs,busincss
undornctsrulcno|dcts
utoundrncwot|d
Using the
Paying Taxes data.
Tleellectolcoipoiutetuxeson
investmentundentiepieneuislip
Comment:Tleellectolcoipoiutetuxesoninvestmentundentiepieneuislip
Intleiiieseuicliecentlypublisled
intleAmcticunFconomicJoutnu|.
Muctocconomics,AndieiSlleileiund
co-uutloisliomtlePuyingTuxesteum
luveusedPuyingTuxesdutu,ulong
witldutucollectedliomnutionul
stutistics olces und liom tle Woild
BunkEntiepieneuislipsuiveys,to
piesentsomeiesultswliclslowtle
ielutionslipsbetweencoipoiuteincome
tuxes,investmentundentiepieneuislip.
Tlepupeiusesdutuliom8Seconomies
undcoveisuluigeciosssectionol
developedunddevelopingcountiies
liomuciosstlewoildsiegions.It
includes27ligl-incomeeconomies,19
uppeimiddle-incomeeconomies,21
loweimiddle-incomeeconomiesund18
low-incomeeconomies.
Wlutdilleientiutestlispupeiliomotlei
studiesistlutitlooksuttleellective
tuxiuteloicoipoiuteincometux(i.e.
tleuctuulcoipoiuteincometuxpuidby
tlecusestudycompunyinielutiontoits
pie-tux piots) iutlei tlun tle stututoiy
tuxiute.
Tleie uie seveiul signicunt conclusions
liomtlepupei:
Tleieisuconsistentundluige
udveiseellectolcoipoiuteincome
tuxoncoipoiuteinvestment.Tle
dutuslowstlutu10%incieuse
intleellectivecoipoiutetuxiute
ieducestleuggieguteinvestment
togiossdomesticpioductiutioby
2.2peicentugepoints(tleuveiuge
investmentiuteis21%),undFoieign
DiiectInvestmentby2.3peicentuge
points(tleuveiugeFDIiuteis3.6%).
Tleieisuconsistentundluige
udveiseellectolcoipoiuteincome
tuxonentiepieneuiiuluctivity.Tle
dutuslowstlutu10%incieuse
intleellectivecoipoiutetux
iuteieducestleentiyiute(tle
numbeiollimitedliubilitycompuny
iegistiutions)by1.4peicentuge
points (tle meun olciul entiy iute
is8%).Itulsoieducesbusiness
density(tlenumbeiollimited
liubilitycoipoiutionslegully
iegisteieddividedbytlewoikinguge
populution) by 1.9 ims pei lundied
people(tleuveiugepeilundied
people is ve).
Higleiellectivecoipoiuteincome
tuxiutesuieussociutedwitl
luigeinloimulsectois.Tledutu
slowstlutu10%incieuseintle
ellectivecoipoiutetuxiuteiuises
tleinloimuleconomyususluie
oleconomicuctivitybyneuilytwo
peicentugepoints.
Tledutusuggestsuluigepositive
ussociutionbetweentleellective
coipoiutetuxiuteundtleuggiegute
debttoequityiutio.A10%incieuse
intleellectivecoipoiutetuxiute
iuisestledebttoequityiutioby40
peicentugepoints(tlemeundebtto
equity iutio is111%).
AmeiicunEconomicJouinul:
Mucioeconomics2(July2010):31-64
lttp://www.ueweb.oig/uiticles.
plp?doi~10.12S7/muc.2.3.31
The cost of tax for
business rises in an
economic downturn
Comment:Tlecostoltuxloibusinessiisesinuneconomicdowntuin
TlePuyingTuxesstudyusestle
PwCTotulTuxContiibution(TTC)
metlodologytoculculutetlecostol
ulltuxesboinebybusiness(tleTotul
TuxRute-TTR).Weusetlesume
metlodologyinouiTTCstudieswitl
ieulcompuniesuioundtlewoild.Tle
iesults liom tlese studies ieect tle
clungesintleeconomiccycleund
tle compunies piotubility, us well us
clungesintletuxsystem.IntlePuying
Tuxesstudy,tlecusestudycompunylus
u xed piot muigin ol 20%, ieguidless
oltleglobuleconomicdowntuin.In
ieulity,compuniesluveloundtleii
piotubility sliinking, und tlut tle cost
ol tuxes lusiisen.
PwCUKcuiiiesoutununnuulTTCstudy
witltleluigestlistedcompunies(FTSE
100)inconjunctionwitlTleHundied
GioupolFinunceDiiectois.Tlelust
tlieestudies(coveiingtuxpuyments
in2007,2008und2009)luveslown
u diop in tlese compunies piots
lollowing tle nunciul ciisis und tle
UKeconomysdeclineintoiecession.
Coipoiuteincometuxpuymentsluve
lullen too, in line witl piots, but
puymentsolotleituxesboine(including
employeissociulcontiibutions,piopeity
tuxesundotleituxes)luvenot.Tle
iesultistluttlecostoltuxesinielution
to commeiciul piotubility (tle TTR) lus
incieusedintledowntuin.
Tle ist cluit slows low tle uveiuge
TTRloimembeisolTleHundiedGioup
lusincieusedduiingtleUKiecession.In
2009,tleTTRloiuieulluigecompuny
(41.6%),isconsideiublyligleitlun
loi tle smullei, piotuble cuse study
compuny in Puying Tuxes(37.3%).
Tlesecondcluitslowstluttlesize
olTleHundiedGioupsTTC,botlin
ubsoluteumountundusupiopoition
oltotulgoveinmenttuxieceipts,lus
loweveibeenmuintuined.In2008,totul
tuxesboineundcollectedweieL66.Sbn
umountingto12.9%olgoveinmenttux
ieceipts. In 2009, tlese guies iose to
L66.6bnund13.1%.Tlisslowstluttle
luigestcompuniesintleUKcontinue
to contiibute u signicunt piopoition ol
tlecountiysoveiulltuxieceipts,despite
tleiecession.
Tlelutest(2009)studyiesultsuie
uvuilubleutwww.pwc.co.uk/ttc
TTRs for the Hundred Group
The contribution of the Hundred Group to UK
tax revenues
Corporation tax Other taxes
2007 2008 2009
36.2%
38.2%
41.6%
40%
30%
20%
10%
Total Tax Contribution (bn)
Percentage of government receipts
2008 2009
100
80
60
40
20
14%
12%
10%
8%
6%
4%
2%
T
T
C

(
b
n
)
%

o
f

G
o
v
e
r
n
m
e
n
t

r
e
c
e
i
p
t
s
Note: Chart shows the average TTR for members of The
Hundred Group participants in the TTC studies.
Source: PwC UK 2009 TTC study for The Hundred Group of
Finance Directors
Note: Chart shows the TTC of The Hundred Group as a
whole, both as an absolute amount and as a percentage of
government revenues.
Source: PwC UK 2009 TTC study for The Hundred Group of
Finance Directors
Figuie2.1setsouttleglobuluveiuge
iesultloieucloltlesub-indicutois
unulysedbytypeoltux.Itulsoincludes
tleiungeoliesults.Tlecusestudy
compuny(TuxpuyeiCo)lusuglobul
uveiugeTotulTuxRute(TTR)ol
47.8%,needs282louistocomply
witlitstuxulluiis,undmukes29.9tux
puyments.Fuitleiunulysisoliegionul
undindividuuleconomyiesultsisset
outbelow.
IntleyeuistluttlePuyingTuxesstudy
lusbeencuiiiedout,tuxieloimsuiound
tlewoildluvediivenudownwuid
tiendintleiesults.Figuie2.2compuies
tleglobuluveiugeiesultswitltlose
meusuied in tle ist study ve yeuis
ugo(PuyingTuxcs2006).Tleuveiuge
TTRluslullenbyS.9%(oimoietlun
1%euclyeui),tletimetocomplyby47
louis(oimoietlunninelouisuyeui)
undtlenumbeiolpuymentsbyulmost
loui.Tleieuieieductionsinulltypesol
tuxesuciossulltlieesub-indicutois.
The Paying
Taxes results
Piot tuxes luve lullen on uveiuge
by1.6%usgoveinmentsuioundtle
woildluveieducedtlestututoiyiute
olcoipoiuteincometuxtostimulute
businessinvestmentundgiowtl.Tle
WoildBunkundIFCluvetiuckedtux
ieloimslowingtlut90economies
luve mude signicunt iute ieductions
sincetlestudybegun.Tlislus
continueddespitetleiecessionwitl37
economiesieducingtleiuteundonly
ve incieusing iutes in tle lust two yeuis
(PuyingTuxcs2010und2011).Rutesol
lubouituxundsociulcontiibutionluve
lullen in 36 economies ovei tle ve
yeuipeiiod,contiibutingtotleuveiuge
lullol1.S%.Tlebiggestlullol2.8%is
loiotleituxesincludingconsumption
tuxes.Inudditiontoiuteieductions,tle
eliminutionoltuxesby37economiesund
tleintioductionolVATtypesulestuxes
in13economiesluscontiibutedtotlis.
Tletimetocomplyluslullenby
oveiuweek,diivenbyieloimsintux
udministiution.Aguin,tleieluvebeen
ieductionsintletimeneededloieucl
oltletlieemujoituxes.Eliminutionol
multipletuxespeibuse(S0economies
now luve one tux pei buse), simplied
piocessesloipuyingtuxes(40
economies)undievisedtuxcodes(32
economies)luvecontiibutedtotle
ieducedtime.
Ptorruxcsnuvc|u||cnonuvctugcby1.6%us
govctnmcnrsutoundrncwot|dnuvctcduccdrnc
srururotyturco|cotpoturcincomcruxrosrimu|urc
busincssinvcsrmcnrundgtowrn
Tlelullintlenumbeiolpuyments
ieects tle positive impuct ol electionic
puy und le systems. Toduy, 61
economies benet liom tlis lucility
compuiedto44economiessixyeuisugo.
Cluptei3contuinsuiticlesliomsome
economieswlicldiscussundliglliglt
lowtleiiiesultsluveclungedsincetle
studybegun.
Corporate income tax is only
part of the burden of taxes
AconsistentmessugeliomtlePuying
Tuxesstudyistlutcoipoiuteincome
tux
24
isonlypuitoltletuxbuiden
onbusiness.Wlenconsideiingtux
ieloim,itisimpoitunttlutgoveinments
tukeintouccountulloltletuxestlut
compuniespuy.Tlisyeuisdutusuppoits
tlismessugeonceuguin.Figuie2.3
slowstlutonuveiuge,loiull183
economiesintlestudy,coipoiute
incometuxuccountsloi12%oltle
tuxpuymentsmudebytlecusestudy
compuny,2S%oltlecompliuncetime,
und38%oltletuxcost(TTR).Tlese
tlieepeicentugesluveluidlymoved
ovei tle lust ve yeuis. In PuyingTuxcs
2006,coipoiuteincometuxmudeup
12%oltletuxpuyments,26%oltle
compliuncetimeund37%oltleTTR.
Figuie2.4slowslowulltledilleient
tuxespuidcontiibutetotleiesultsloiun
economy,usingZumbiuusunexumple.
InZumbiu,TuxpuyeiCopuysnine
dilleienttuxes.Pensioncontiibutions
(S.6%)undwoikeiscompensution
(4.8%)uietleluigestelementsoltle
tuxcost(TTR:16.1%).Vulueudded
tuxisnotucosttoTuxpuyeiCo,but
udds signicuntly to tle compliunce
buiden.VATuccountsloi46%oltle
louistocomplyund32%oltletux
puymentsiequiied.
Figure 2.1
The global average result for each indicator
Tax type Total Tax Rate Time to comply Number of payments
Prot taxes 18.1% 71 3.7
Labour taxes & contributions 16.2% 102 12.1
Other / Consumption taxes 13.5% 109 14.1
Total 47.8% 282 29.9
Minimum 0.2% 0 2
Maximum 339.7% 2,600 135
Figure 2.2
The global average results Paying Taxes 2006 and 2011
Tax type Total Tax Rate Time to comply
Number
of payments
2011 2006 Change 2011 2006 Change 2011 2006 Change
Prot taxes 18.1% 19.7% -1.6% 71 85 -14 3.7 4.2 -0.5
Labour taxes & contributions 16.2% 17.7% -1.5% 102 120 -18 12.1 13.5 -1.3
Other / Consumption taxes 13.5% 16.2% -2.8% 109 124 -15 14.1 16.1 -2.0
Total 47.8% 53.7% -5.9% 282 329 -47 29.9 33.8 -3.9
Figure 2.4
How different taxes impact on the results - Zambia
Tax Number of payments Time to comply Total Tax Rate
Corporate income tax 5 48 1.7%
Pension contribution 12 24 5.6%
Workmen compensation contribution 1 - 4.8%
Value added tax (VAT) 12 60 -
Fuel tax 1 - 2.0%
Road trafc commission 4 - 0.2%
Property transfer tax 1 - 1.8%
Tax on interest 0 - -
Medical levy 1 - 0.0%
Total 37 132 16.1%
Figure 2.3
Corporate income tax is only part of the burden
Note: The chart shows the average for all economies in the study
Source: PwC analysis
Payments
Time
TTR
12% 41% 47%
25% 36% 39%
38% 34% 28%
Profit taxes Labour taxes Other taxes
Wncnconsidctingrux
tc|otm,irisimpotrunr
rnurgovctnmcnrs
rulcinrouccounr
u||o|rncruxcsrnur
compunics puy
Note: The table shows the average results for all economies in the study.
Note: The table shows the global average result in 2011 compared to 2006 and the degree of change.
23
Note: This table is an illustration of the impact of the different taxes on the results using Zambia.
23
The changes/trends quoted in this table, and generally in Chapter 2, reect the movement in the global averages for all economies included in each study for 2006 and 2011. There are eight more
economies in the 2011 study than in the 2006 study. The trends referred to in Chapter 1 and in Key themes and ndings, are calculated on the basis of only the economies that were included in
both studies.
24
The percentage for corporate income tax (CIT) also includes other taxes calculated by reference to prot. However, CIT is the predominant tax on prot. Only eight economies in the study do not
have CIT.
The number of taxes paid
by business
Coipoiuteincometuxisonlyoneol
munytuxespuidbybusiness.Tlisis
slownbylookinguttlenumbeiol
tuxestluttlecusestudycompuny
mustcomplywitluioundtlewoild.
TuxpuyeiColustopuy9.4dilleienttuxes
onuveiuge(botltlosetlutuieboine
bytlecompunyundtloseitcollectson
belull ol goveinment) see guie 2.S.
Piot tuxes uie mostly coipoiute income
tux,wliclistlemostcommontuxon
piots. Only eiglt economies, out ol tle
183intlestudy,dontluveucoipoiute
incometuxwitlintleiituxiegimeloi
tle cuse study compuny. Piot tuxes
ulsoincludeunyotleituxesculculuted
by ieleience to piots sucl us tle
enteipiisetuxinJupun,oiseconduiytux
oncompuniesinSoutlAliicu.
Lubouituxesincludeuvuiietyoltuxes
undsociulcontiibutionstlutielute
toemploymentundcunbeleviedon
tleemployeioionemployees.Luboui
tuxesundcontiibutionswlicluietle
employeiscostuieincludedintleTTR
undintlecompliuncebuiden.Tletime
spentdeductingtleemployeessluie
tliougltlepuyiollisulsoincludedin
tletimetocomply.
Someeconomieslevyusinglesociul
contiibution,suclustlepuyiolltux
inSweden,wliclisboinebybotl
employeiundemployee.Inotleis,
tleieuieseveiuldilleientcontiibutions.
Foiexumple,Romuniulusseven
suclcontiibutions.Sociulsecuiity
contiibutions,leultlinsuiunce
contiibutionsundunemployment
contiibutionsuieullboinebybotltle
employeiundemployeeinRomuniu.
Accidentiisklund,lubouiinspectoiute
commission,guuiunteelund,und
mediculleuve,uieboineonlyby
tleemployei.
Consumptiontuxesincludevulueudded
tux(VAT)undotleisulestuxes.VATis
tlemostdominuntloimolconsumption
tuxuioundtlewoildinsomeloimoi
otlei,itisusedin148economies.Tle
UnitedStutesistleonlyOECDundG8
membeieconomytlutdoesnotluveu
VATsystem.
Tuxesonpiopeityincludelocultuxes
onpiopeityowneislipoiuse,suclus
businessiutesintleUnitedKingdom
undlundtuxinAustiuliu.Inuddition,
piopeitytuxesincludetuxesontle
tiunsleiolpiopeity,suclusstumpduty
inMuuiitiusundumunicipulpiopeity
tiunslei tux inBulguiiu.
As guie 2.S slows, tleie uie muny
otleituxesleviedonbusiness.On
uveiuge,tleieuielouiotleituxes
loiouicusestudycompuny.Tlese
includetuxesoninteiestundcleque
tiunsuctions,tuxesoilicenceleesloi
motoivelicles,ioudmuintenuncelevies,
udveitisingtuxes,undtuxesonieluse
collectionundseweiuge.
Twoeconomies,JupunundSweden,
piovideugoodexumpleoltlevuiiution
intlenumbeioltuxesleviedon
business (guie 2.6). Sweden lollows
best piuctice und levies just ve tuxes
ontlecusestudycompunyonetux
peituxbuse.Tleieiscoipoiutetux,
puyiolltux,ieulestutetux,VATundluel
tux.Incontiust,Jupunlevies20tuxes,
witl tliee tuxes on piot, ve luboui
tuxesundcontiibutions,sixpiopeity
tuxes, one consumption tux, und ve
otleituxes.
Figure 2.5
Global average number of taxes paid by the case study company 9.4 taxes
Prot taxes (1.3)
Labour taxes (2.0)
Consumption taxes (1.0)
Property taxes (1.0)
Other taxes (4.1)
Total 9.4
Note: The chart shows the average result for all economies in the study
Itisimpoitunttonotetlutleweituxes
donotnecessuiilymeunuloweituxcost.
SwedenlusuTTRolS4.6%undJupun
48.6%.Howevei,Swedeniuisestlese
ievenues using just ve tuxes, wlile
Jupunuseslouitimesusmuny.Tlisis
ieected in tle compliunce buiden on
business.InSweden,TuxpuyeiConeeds
just36louistocomplywitltlepuyioll
tux(tleonlytuxonemployment).In
Jupun,ittukes140louistocomply
witl tle ve dilleient luboui tuxes
undcontiibutions.
Figuie2.7slowstleuveiugenumbei
oltuxesloiunumbeioliegionulund
economicgioupings,compuiedto
tlewoilduveiuge.Tleuveiugevuiies
liom 8.S in tle Asiu Pucic
2S
to11.0
intleOECD
26
und11.4intleG20
27
economies.Itisinteiestingtluttle
uveiugenumbeioltuxesisligleiintle
luigei,mostdevelopedeconomies.Tle
OECDeconomies,loiexumple,luveun
extiulubouituxundoneoitwomoie
otleituxesonuveiugetluneconomies
in Asiu Pucic oi Centiul Asiu und
EusteinEuiope
28
.
Figure 2.7
Average number of taxes to comply with by region
lrisimpotrunrronorc
rnur|cwctruxcsdonor
ncccssuti|ymcunu|owct
ruxcosr.
Figure 2.6
Number of taxes in Japan and Sweden
Sweden Japan
Tax base Tax TTR Tax TTR
Prot Corporate income tax 1 16.4% Corporate income tax 18.3%
Enterprise Tax 5.6%
Inhabitants tax 4.0%
Labour Payroll tax 1 36.6% Health insurance 4.6%
Welfare pension insurance 8.9%
Child allowance contribution 0.1%
Workmens accident compensation 0.4%
Employment insurance 0.7%
Consumption Value added tax (VAT) 1 - Value added tax (VAT) -
Property Real estate tax 1 0.5% Fixed Assets Tax 1.3%
City Planning Tax 0.3%
Depreciable Fixed Assets Tax 1.6%
Business Premises Tax 0.3%
Real Property Acquisition Tax 0.8%
Stamp Tax 0.1%
Other Fuel tax 1 1.1% Automobile Tax 0.0%
Automobile Tonnage Tax 0.0%
Fuel tax 1.4%
Registration and license tax 0.2%
Tax on interest 0.0%
Total Tax Rate 54.6% 48.6%
Note: the table lists the taxes paid in Sweden and Japan and the contribution to the Total Tax Rate
Asia Pacific
Central Asia & Eastern Europe
World Average
African Union
European Union
OECD
G20
12%
1.3 1.8 5.4 8.5
1.1 1.8 5.9
1.4 1.8 7.1
8.9
1.3 2.0 6.0
1.3 2.0 6.1
9.3
9.4
1.3 2.7 6.9 10.9
1.3 2.9 6.8 11.0
10.3
1.6 2.9 6.9 11.4
Note: The chart shows the average number of taxes for the economies in each region
Prot taxes Labour taxes Other taxes
25
Asia Pacic includes Afghanistan, Australia, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, Fiji, Hong Kong (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.
26
OECD member countries include Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea (Rep.),
Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.
27
G20 member states include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea (Rep.), Mexico, Russian Federation, Saudi Arabia, South Africa,
Turkey, United Kingdom, United States.
28
Central Asia and Eastern Europe includes Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyz Republic, Macedonia FYR, Moldova,
Montenegro, Russian Federation, Serbia, Tajikistan, Turkey, Ukraine, Uzbekistan.
The Total Tax Rate (TTR)
TleTTRmeusuiestletuxcostloi
TuxpuyeiCo.Coipoiuteincometuxund
ullotleituxesboinebytlecompuny
uieuddedtogetleiundexpiessedusu
peicentuge ol its piot beloie ull ol tlose
tuxes. Tlis piot beloie ull tuxes boine is
culled tle commeiciul piot in tle Woild
BunkundIFCmetlodology.
To illustiute tle TTR culculution, guie
2.8slowstleiesultsloiItuly.Alltuxes
boinebyTuxpuyeiCoinItuly(botl
uboveundbelowtleline)totul977k,
undiepiesent68.6%olcommeiciul
piot. Tle pie cluit in guie 2.9 slows
tletuxesboineinItulybypeicentuge.
Lubouituxesundcontiibutions
uccountloi64%oltleTTR(S1%in
sociulsecuiitycontiibutionsund13%
inmundutoiycontiibutionloiwoik
teiminution).Fedeiul(IRES)undlocul
(IRAP)coipoiuteincometuxuccount
loi u luitlei 33% und ve smullei tuxes
mukeuptleiemuining3%.Figuie2.10
slowslowtleTTRloiItulycompuies
totleuveiugeiuteinneiglbouiing
economiesintleEuiopeunUnion
29
und
totlewoilduveiuge.Itulsoslowslow
botl luboui tuxes und tuxes on piot
contiibutetotleligleiiute.
As slown in guie 2.1, tle uveiuge TTR
loiulleconomiesintlestudyis47.8%.
Tlis is split by piot tuxes (18.1%),
lubouituxes(16.2%),undotleituxes
boine(13.S%).Figuie2.11illustiutes
tledistiibutionoliesultsloitleTTR
uioundtlewoildundslowstluttleie
isstiongconcentiutionoleconomies
witluTTRintleiungeliom2S%to
S0%(110economies).2Seconomies
luveTTRsbelow2S%und48economies
oveiS0%.Figuie2.12compuiestle
distiibutionoliesultswitltloseliom
ve yeuis ugo in PuyingTuxcs2006,
undslowstledownwuidtiendintux
cost.InPuyingTuxcs2006,tleglobul
uveiugeTTRwusS3.7%(S.9%liglei
tluninPuyingTuxcs2011)und107ol
tleeconomiesludTTRswlicllellintle
iungebetween30%undSS%.
Figure 2.8
The TTR calculation for Italy
000 000
Prot before tax (PBT) 675
Add back above the line taxes borne:
Social security contributions 496
Mandatory contribution for work termination 123
Regional tax on productive activities 95
Fuel tax 19
Tax on real estate 12
Chamber of commerce duties 2
Fixed tax on legal and scal registries 1
Stamp duty on property transfer 0
748
Prot before all taxes borne / commercial prot 1,423
Corporate income tax on PBT after necessary adjustments (229)
Above the line taxes borne (748)
Total taxes borne (977)
Prot after tax 446
TTR = total taxes borne / commercial prot 68.6%
Note: The table shows an example of the calculation of TTR for Italy
Social Security
contributions
51.0%
Mandatory
contribution
for work
termination
(TFR) 13.0%
Corporate
income tax
(IRES) 23.0%
Regional tax
on productive
activities
(IRAP) 10.0%
Other 3.0%
Fixed tax on legal and fiscal registries 0.0%
Stamp duty on property transfer 0.0%
Chamber of commerce duties 0.0%
Tax on real estate (ICI) 1.0%
Fuel tax 2.0%
Figure 2.9
The TTR for Italy by percentage
Figure 2.10
TTR for Italy compared to the EU and world
average
EU World Italy
44.2%
47.8%
68.6%
Note: The chart shows the components of the TTR for Italy
split by percentage
Note: The chart compares the TTR for Italy with the European
Union and world average
29
The European Union includes Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg,
Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom.
Figuie2.13liststleeconomiesutbotl
tleloweiendoltleiesults(TTRsol
lesstlun20%)undtleligleiend
(TTRsolmoietlun70%).Economies
uttleloweiendincludeoil-iiclstutes
liketleUnitedAiubEmiiutes(14.1%)
undislundstutessuclustleMuldives
(9.3%).TleMuldivesleviestlieetuxes
boineonTuxpuyeiCopiopeitytiunslei
tux(9.1%),businessiegistiutionlees
(0.1%),undvelicleiegistiutionlees
(0.1%)-butcollectsmostolitsievenue
liom piots tuxes on tle touiism und
bunkingsectois.TleUAEdoesnotluve
piots tux loi domestic business. But it
doeslevyusociulsecuiitycontiibution
ontleemployei,wlicluccountsloi
mostoltle14.1%TTR,plustwootlei
smulltuxes-utiudelicencelee(0.01%)
unduvelicleiegistiutionlee(0.03%).
Cuscudingsulestuxsystemsudd
diumuticully to tle tux cost in ve
Aliicuneconomies(Buiundi,Comoios,
CongoDemociuticRepublic,Tle
Gumbiu,undSieiiuLeone).Cuscuding
stylesulestuxsystemsuddextiutuxcosts
toeuclconsumeisotlutunelementol
tlemisboinebyeuclcompunyintle
supplycluin.Tleymukeup9S%oltle
liglTTR(23S.6%)inSieiiuLeone,loi
exumple.Since2009,(tlebusepeiiod
loiPuyingTuxcs2011),Buiundilus
clungedtouVATsystem,wliclwill
consideiublyieducetleTTRinlutuie
yeuis.Tuinoveituxes(leviedontuinovei
iutlei tlun piots) in Aigentinu und
CteDIvoiieulsouddtotletuxcost.
Note: The chart shows the distribution of TTR for all economies in the study
Note: The chart compares the distribution of TTRs for economies in Paying Taxes 2011 and 2006.
Low TTR
Region Economy TTR
African Union

Namibia 9.6%
Zambia 16.1%
Botswana 19.5%
Lesotho 19.6%
Asia Pacic

Timor-Leste 0.2%
Vanuatu 8.4%
Maldives 9.3%
Samoa 18.9%
Central Asia
& Eastern
Europe

Macedonia, FYR 10.6%
Georgia 15.3%
Kosovo 16.5%
Middle East

Qatar 11.3%
United Arab Emirates 14.1%
Saudi Arabia 14.5%
Bahrain 15.0%
Kuwait 15.5%
West Bank and Gaza 16.8%
High TTR
Region Economy TTR
African Union

Algeria 72.0%
Eritrea 84.5%
Burundi 153.4%
Central African Republic 203.8%
Comoros 217.9%
Sierra Leone 235.6%
Gambia, The 292.3%
Congo, Dem. Rep. 339.7%
Asia Pacic Palau 73.0%
Central Asia
& Eastern
Europe
Belarus 80.4%
Tajikistan 86.0%
Uzbekistan 95.6%
Latin America
& Caribbean
Colombia 78.7%
Bolivia 80.0%
Argentina 108.2%
Note: The chart list economies with low TTRs (less than 20%) and high TTRs (greater than 70%)
Figure 2.11
Distribution of TTR results 110 economies have TTRs between 25% and 50%
0
%
5
%
6
%
1
0
%
1
1
%
1
5
%
1
6
%
2
0
%
2
1
%
2
5
%
2
6
%
3
0
%
3
1
%
3
5
%
3
6
%
4
0
%
4
1
%
4
5
%
4
6
%
5
0
%
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
%
TTR
0
5
10
15
20
25
30
35
0
%
5
%
6
%
1
0
%
1
1
%
1
5
%
1
6
%
2
0
%
2
1
%
2
5
%
2
6
%
3
0
%
3
1
%
3
5
%
3
6
%
4
0
%
4
1
%
4
5
%
4
6
%
5
0
%
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
%
TTR 2011
0
5
10
15
20
25
30
35
TTR 2006
Figure 2.12
The trend in results for the TTR since the rst study In Paying Taxes 2006, 107 economies had
TTRs between 30% and 55%
Figure 2.13
List of low and high TTR economies by region
Figuie2.14slowstleuveiugeTTR
byiegionulgiouping.TleAsiu
Pucic iegion lus tle lowest TTR ol
tlegioupings(36.9%),wlileLutin
AmeiicuundtleCuiibbeun(48.0%),
tleG20(S0.0%),undtleAliicunUnion
(66.4%)ullluveunuveiugeTTRubove
tlewoilduveiuge.Wliletleuveiuge
TTRloiulleconomiesintlestudylus
dioppedby1.3%intlelustyeui(liom
49.1%to47.8%),tlebiggestclungeis
intleCentiulAsiuundEusteinEuiope
iegionulgioupingwleietleuveiugelus
dioppedby3.1%(42.S%compuiedto
4S.6%lustyeui).Figuie2.1Scompuies
tleuveiugeTTRintlisiegionloitle
lusttwoyeuis,undslowstlebiggest
lulls in piot tuxes (1.2%) und otlei
tuxes(1.4%).Tlislusbeendiivenby
ieloimsinsomeoltleeconomiesintle
iegion.FYRMucedoniuundKosovobotl
mudeieloimstotleiicoipoiuteincome
tuxiegimes,undBeluiusieducedtle
tuinoveitux,tlebuseloipiopeitytux,
und sociulcontiibutions.
Figuie2.14ulsoslowstluttlemuke-
up ol tle TTR vuiies by iegion. Piot
tuxesuccountloi18.1%olcommeiciul
piot on uveiuge uiound tle woild, but
iepiesentuligleipeicentugeinAsiu
Pucic (18.9%), Lutin Ameiicu und tle
Cuiibbeun(21.9%),undtleAliicun
Union(22.2%).
Tlestututoiyiuteolcoipoiuteincome
tuxisoltennotugoodindicutoioltle
iuteoltuxpuid.Tlisisbecuusetuxiules
iequiieudjustmentstotleuccounting
piot to culculute tle tuxuble piots.
ZumbiuundKenyupiovideugood
exumple.InZumbiu,tlestututoiyiuteol
coipoiuteincometuxis3S%.Howevei,
ouicusestudycompunyieceives
geneioustuxullowuncesonitscupitul
investment,undcoipoiuteincometux
puid is only 1.7% ol commeiciul piot.
InKenyu,tlestututoiyiuteis30%,but
tledisullowunceolstuit-upundotlei
expensesincieusecoipoiuteincometux
puid to 33.1% ol commeiciul piot.
TleUKpiovidesunotleigoodexumple.
IntleUK,tlestututoiyiuteolcoipoiute
incometuxluslullenliom30%to
28%.Howevei,tleieductioniniuteis
compensutedloibytleiestiictionintux
ullowuncesloicupitulexpendituie.Asu
smullcompuny,TuxpuyeiCoissubjectto
u lowei stututoiy iute und did not benet
inlullliomtleiuteieduction,butdoes
sulleiliomtleiestiictionolieliels.As
u iesult, tle piot tux element ol tle
TTRintleUKioseliom21.9%inPuying
Tuxcs2010to23.1%intle2011study.
TTRsloiuselectionoleconomiesin
Asiuwitliesultsuciosstleiungeuie
compuied in guie 2.16. Singupoie
lustlelowestTTR(2S.4%)-oneol
tlelowestelementsuttiibutubleto
coipoiuteincometux(7.4%)-undtle
loweststututoiyiute(17%).Singupoie
lusludupolicyollowcoipoiuteincome
tuxiutesloisomeyeuisusumeunsol
uttiuctingbusinessinvestmentundjob
cieution.InClinu,tlestututoiyiuteis
ligleiut20%,butTuxpuyeiCopuysonly
S.S% ol commeiciul piot in coipoiute
incometux(tlelowestumongtlese
economies)duetogeneiousullowunces
loistuit-upundbusinessdevelopment
expendituie.InJupun,tlestututoiy
iuteis30%,undtlecompunypuys
two otlei piots tuxes: un enteipiise
tux,uttlestututoiyiuteol9.2%,und
uninlubituntstux,utuiuteol6.2%.
InJupun,TuxpuyeiCopuys27.9%ol
commeiciul piots in piot tuxes.
Tncsrururotyturco|
cotpoturcincomcrux
iso|rcnnorugood
indicuroto|rncturc
o|ruxpuid
Figure 2.14
Comparison of the TTR by region
Figure 2.15
The trend in TTR for Central Asia and
Eastern Europe
Note: The chart shows the average result for the economies
in each region and the world average for all economies in
the study.
Note: The chart compares the average TTR for Central Asia
and Eastern Europe region between Paying Taxes 2011 and
Paying Taxes 2010.
Asia Pacific
Central Asia &
Eastern Europe
OECD
European Union
World Average
Latin America
& Caribbean
G20
African Union
36.9%
42.5%
43.1%
44.2%
47.8%
48.0%
50.0%
66.4%
2011
2010
42.5%
45.6%
10.9% 21.5% 10.1%
12.1% 22.0% 11.5%
Figure 2.16
Comparison of TTRs for a selection of Asian
economies
Figure 2.17
TTRs for the European Union
Figure 2.18
The TTR for Romania by percentage
Note: The chart shows the TTRs for economies in the European Union split by type of tax compared to the EU and the
world average
Note: The chart shows the average TTR in a selection of
Asian economies and compares these to the Asia Pacic and
world average.
Note: The chart shows the components of the TTR for
Romania split by percentage
Foiulmostulliegionulgioupings,
coipoiuteincometuxuccountsloiless
tlunlulloltleTTR.Tlepeicentuge
mudeupbylubouituxesvuiiesbetween
iegions,witltleliglestpeicentugein
tle EU (28.4% ol tle commeiciul piot),
undoneoltlelowestintleAliicun
Union(14.S%).Conveisely,tleuveiuge
peicentugeuccountedloibyotleituxes
islowintleEU(2.7%olcommeiciul
piot), und is tle liglest in tle Aliicun
Union
30
(29.7%).
TTRsvuiybetweenneiglbouiing
economies.Figuie2.17slowsTTRs
loitle26EUeconomiesintlestudy
(Multuisnotincluded).Higltuxes
onemploymentuieuleutuieoltle
iegion.Tleuveiugeiuteollubouituxes
loitleemployeiintleEUis28.4%ol
commeiciul piots und tle liglest ol
tleiegionsslown.Tlisisnottosuy,ol
couise,tlutligleiiutesuiewoise-tle
EUisuiegionwleietleligllevelol
sociul puyments is ieected in tle sociul
suppoitseivicestlutgeneiullyexistin
tleiegion.
Romuniuisunexumpleollowluboui
tuxesundcontiibutionscunbetle
mujoipuitoltleTTRloiouicusestudy
compuny (see guie 2.18). Romuniu lus
sevenlubouituxes,wlicluccountloi
72%oltleTTR.Lubouituxesboineby
tleemployeiuie32.3%olcommeiciul
piot in Romuniu, compuied to 28.4% in
tleEUund16.2%globully.
ItisimpoitunttonotetluttleTTR
meusuiesonlylubouituxesundsociul
contiibutionsboinebytleemployei
undnottloseleviedontleemployee.
Buttleseuieincludedintlemeusuie
olcompliuncebuiden(louistocomply)
wleietleemployeiisiesponsibleloi
deductingtlemliomsuluiiesundpuying
tlemoveitotletuxuutloiities.Tley
uienotincludedintlemeusuieoltux
cost(TTR).ClileisunoutlieiinLutin
AmeiicuundtleCuiibbeun
31
intlut
lubouituxesundsociulcontiibutions
uieimposedluigelyontleemployee.
TlelowTTRloiClile(2S%)undtle
lowpeicentugeloilubouituxes(3.8%)
slould be ieud witl tlis context inmind.
Luxembourg
Cyprus
Ireland
Bulgaria
Denmark
Slovenia
United Kingdom
Latvia
Lithuania
Netherlands
Poland
Portugal
Finland
Romania
Greece
Germany
Slovak Republic
Czech Republic
Estonia
Hungary
Sweden
Austria
Spain
Belgium
France
Italy
21.1%
23.2%
26.5%
29.0%
29.2%
35.4%
37.3%
38.5%
38.7%
40.5%
42.3%
43.3%
44.6%
44.9%
47.2%
48.2%
48.7%
48.8%
49.6%
53.3%
54.6%
55.5%
56.5%
57.0%
65.8%
68.6%
Profit taxes Labour taxes Other taxes EU average 44.2% World average 47.8%
Corporate
income tax (23%)
Social security
contributions (52%)
Health insurance
contributions (11%)
Unemployment
contribution (4%)
Accident
risk fund (2%)
Medical leave (2%)
Labour
inspectorate
commission (1%)
Guarantee fund (1%)
Fuel tax (2%)
Building tax (2%)
Other (0%)
Singapore
Korea, Rep.
Thailand
Japan
China
25.4%
29.8%
37.4%
48.6%
63.5%
World average
47.8%
Asia Pacific
average 36.9%
30
African Union includes 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, Mozambique, Namibia, Niger, Nigeria, Rwanda, So Tom and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia,
Zimbabwe (NB suspended countries are included).
31
Latin America and Caribbean includes Antigua and Barbuda, Argentina, Bahamas (The), Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador,
Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname,
Trinidad and Tobago, Uruguay, Venezuela (R.B).
Figuie2.19compuiestleleveloltuxes
undcontiibutionsonemployment
inCliletotloseinneiglbouiing
Colombiu.InColombiu,tleemployei
beuis73%oltletotulbillloisociul
contiibutions,undlubouituxesuie
33.9% ol commeiciul piots. In Clile,
86%olsociulcontiibutionsuieboineby
tleemployee.Pieliminuiyieseuiclby
tle Woild Bunk und IFC lus identied
sixotleieconomiesintlestudywlicl
uieoutlieisintlisiespect,intlesume
wuyusClile.
IntleAliicunUnion,tleiungeol
iesults loi tle TTR is wide (see guie
2.20).TleTTRiungesliom9.6%
inNumibiuto339.7%intleCongo
DemociuticRepublic.
AleutuieolsomeAliicuntuxsystems
istleligllevelolotleituxesintle
TTR.Aspieviouslymentioned,in
ve countiies witl TTRs ovei 100%,
cuscudingsulestuxesuddconsideiubly
totlecost.Buiundi,Comoios,Congo
DemociuticRepublic,TleGumbiu,und
SieiiuLeoneullluvetlesetuxeswlicl
mukeuptlemujoiityoltleTTR(see
guie 2.21). Il tle Aliicun economies
witlTTRsovei100%uieexcluded,
tleuveiugeloitleiegiondiopsto
43.2%,wliclisbelowtlewoildund
EUuveiuge.
Namibia
Zambia
Botswana
Lesotho
Mauritius
Malawi
South Africa
Ethiopia
Rwanda
Nigeria
Ghana
So Tom and Principe
Mozambique
Uganda
Sudan
Swaziland
Cape Verde
Madagascar
Djibouti
Zimbabwe
Egypt, Arab Rep.
Gabon
Liberia
Seychelles
Cte d'Ivoire
Burkina Faso
Tanzania
Guinea-Bissau
Senegal
Niger
Cameroon
Kenya
Togo
Mali
Angola
Guinea
Equatorial Guinea
Tunisia
Chad
Congo, Rep.
Benin
Mauritania
Algeria
Eritrea
Burundi
Central African Republic
Comoros
Sierra Leone
Gambia, The
Congo, Dem. Rep.
9.6%
16.1%
19.5%
19.6%
24.1%
25.1%
30.5%
31.1%
31.3%
32.2%
32.7%
33.3%
34.3%
35.7%
36.1%
36.8%
37.1%
37.7%
38.7%
40.3%
42.6%
43.5%
43.7%
44.1%
44.4%
44.9%
45.2%
45.9%
46.0%
46.5%
49.1%
49.7%
50.8%
52.2%
53.2%
54.6%
59.5%
62.8%
65.4%
65.5%
66.0%
68.4%
72.0%
84.5%
153.4%
203.8%
217.9%
235.6%
292.3%
339.7%
World average 47.8% African union average 66.4%
Figure 2.20
TTRs for the African Union
Figure 2.19
Social contributions borne and
collected in Colombia and Chile
Figure 2.21
Impact of the sales tax system on the TTR in Africa
Economy TTR
Sales tax
element
Proportion
of TTR
Sierra Leone 235.6% 224.3% 95%
Comoros 217.9% 186.5% 86%
Burundi 153.4% 126.2% 82%
The Gambia 292.3% 238.0% 81%
Congo Democratic Republic 339.7% 272.8% 80%
Note: The table shows the TTR for ve economies in Africa which have a
cascading sales tax and the proportion of the TTR attributable to the sales tax.
Note: The chart shows the percentage split
of social contributions in Colombia and Chile
between those levied on the employer and
those levied on the employee.
Source: PwC Analysis
Note: The chart shows the TTR for economies in the African Union (AU) split by type of tax compared to the AU and world average
Labour taxes borne
Labour taxes collected
Colombia
Chile
73% 27%
14% 86%
Paying Taxes 2011 33 Paying Taxes 2011 33
A study of the economic
contribution mining
companies make to
SXEOLFQDQFHV
Comment: Mining compunies contiibution to public nunces
TotulTuxContiibution(TTC)isu
metlodologyloiidentilyingund
meusuiingulloltledilleienttuxes,
ioyultiesundotleiumountstlut
compuniespuytogoveinment.
PwCssecondTTCstudywitlmining
compunies,publisledinMuy2010,
lelpedtobiingtiunspuiencyuiound
tleextentoltleeconomiccontiibution
tlutminingcompuniesmuketotle
public nunces in tle countiies wleie
tleyopeiute.Tleminingindustiy,
peilupsmoietlunotleis,iemitsluige
umountsolnon-incometuxestovuiious
levelsolgoveinmentindilleientloims.
Howevei,tlesenon-incometuxes
muy not be liglliglted in nunciul
stutements,leuvingunincomplete
pictuieoltlecontiibutiontlutmining
compuniesmuke.
Miningcompuniesuieundeiincieused
publicsciutinyieguidingtletuxestley
puy,undinsomecountiies,goveinments
luveimposedoiuielookingtoimpose
udditionulleviesontlesectoi.Tleie
isulsogiowingpiessuieonbotl
goveinmentundbusinesstoincieuse
tiunspuiencyintleextiuctiveindustiies,
witlucullloicompuniestopublisl
wluttleypuy,undloigoveinments
topublislwluttleyieceiveundto
iepoitlowtleyusetleseievenues.
TleDoddFiunkWullStieetReloimAct,
signedbyPiesidentObumuinJuly2010,
willinlutuieiequiieSECiegisteied
compuniesintlesectoitodisclosetleii
puymentstogoveinmentbycountiy
undbypioject.PwCsTTCwoikwitl
miningcompunieslusulieudylelpedto
tliowligltontlesculeoltleeconomic
contiibutiontleymuketopublic
nunces. A numbei ol tlese compunies
uieulsousingtlisinloimutionintleii
own coipoiute iepoiting.
TleTTCstudyincluded22mining
compuniesleudquuiteieduioundtle
woild.Itlookeduttleiituxesundotlei
contiibutionspuidtogoveinment,in
20countiiesolopeiution,intleyeuito
31Decembei2008.Tlestudyiesults
uieuvuilubleutwww.pwc.com/ttc-
mining-study.
TleTTCminingstudyslowstluton
uveiugeuioundtlewoild:
Coipoiuteincometuxisonly40%ol
ulltuxesundcontiibutionsboineby
miningcompunies.
FoieveiyS1olcoipoiuteincometux,
miningcompuniespuyunotleiS1.S0
inotleituxesundcontiibutions
boineplusS0.S2intuxescollected.
Miningcompuniescontiibuteun
umountequivulentto1S.3%oltleii
tuinoveitogoveinment.
Foieveiyemployee,mining
compuniespuidunuveiugeol
S1S,349inemploymenttuxesulone.
Tleielusbeenupositiveiesponseto
tlestudy,vulidutingouipeiception
tluttleieiskeeninteiestinbettei
undeistundingtlecompletetuxund
otleipuymentstlutminingcompunies
muketogoveinment.Tlestudyiesults
luvebeenusedbygoveinment,investois
undcivilsocietyoigunisutions,us
wellusbytleindustiyundmining
compuniestlemselves.
Taxes and contributions borne by mining
companies by percentage
Note: Pie chart shows the average picture for taxes and
contributions borne by mining companies.
Source: Total Tax Contribution. A study of the economic
contribution mining companies make to public nances
March 2010
Production taxes (11%)
Property taxes (2%)
Mining taxes (5%)
Royalties, licence fees
and resource rents (16%)
Other contributions (6%)
Corporate income
tax (40%)
Other profit taxes (0%)
People taxes (20%)
34 Paying Taxes 2011 34 Paying Taxes 2011
Paying taxes
and development
Comment:Puyingtuxesunddevelopment
Economiesulluioundtlewoilddepend
ontuxestolundpublicexpendituie,
meeteconomicundsociulobjectives,
undimpiovecitizenslives.Howevei,
developingeconomiesgeneiullydeiive
uloweipeicentugeoltleiiievenues
liomtuxesundielymoieondebtoi
inteinutionuluid.Witluidmonies
negutivelyullectedbytleeconomic
downtuin,itiscleuitluttuxievenues
uieumoiesustuinublesouiceol
nuncing loi developing countiies.
Tleieistleieloieunincieused
locusontleioletluttuxcunpluyin
inteinutionuldevelopment.
Tleieuieunumbeiolclullengesto
incieusingtuxievenuesindeveloping
countiies,includingieloimingtleii
tuxsystemstoieducetlesizeoltle
inloimuleconomyundtoencouiuge
loculbusinessestoiegisteiundpuytux.
Figuies2.22und2.39slowtlutTotul
TuxRutes(TTRs)tendtobeliglei,und
tlelouistocomplylongei,inlowei-
incomeeconomies.
Intlestudy,tleieuieunumbeiol
smulleconomieswlodowellontle
PuyingTuxesindicutoiundulsoonu
numbeiolotleiimpoituntundielevunt
meusuies.HongKong(Clinu),Iielund,
Luxembouig,Muuiitius,Singupoieund
Switzeilund,ulliunkintletop20loi
tleoveiulleuseolpuyingtuxesundulso
scoieligllyontwootleiindicestle
UnitedNutionsHumunDevelopment
Index(wliclisusummuiymeusuie
ollumundevelopmentbusedonlile
expectuncy,liteiucyiuteundstunduid
olliving)undtleTiunspuiency
InteinutionulCoiiuptionPeiception
Index(wliclindicutestlepeiceived
levelolpublicsectoicoiiuptionin
uneconomy).Tleseeconomiesmuy
tleieloieolleibestpiucticesoipiovide
umodelloiotleituxsystems.
TlesesixeconomiesullluveTTRs
wlicluiewellbelowtlewoilduveiuge
ol47.8%(HongKong(Clinu):24.1%,
Iielund:26.S%,Luxembouig:21.1%,
Muuiitius:24.1%,Singupoie:2S.4%und
Switzeilund:30.1%).Tleyulsoluve
compliuncetimewlicliswellbelowtle
woilduveiugeol282louis(HongKong
(Clinu):80,Iielund:76,Luxembouig:
S9,Muuiitius:161,Singupoie:84und
Switzeilund:63).

Ease of
Paying Taxes
ranking (1)
Human
Development
Index ranking (2)
Corruption
Perception Index
ranking (3) Income level (4)
Hong Kong, China 3 24 12 High-income
Ireland 7 5 14 High-income
Luxembourg 15 11 12 High-income
Mauritius 12 81 42 Upper middle-income
Singapore 4 23 3 High-income
Switzerland 16 9 5 High-income
(1) The World Bank, IFC and PwC, Paying Taxes 2011 the Global Picture (ranking out of 183)
(2) UNDP Human Development Index 2007 (ranking out of 182 up to 38 categorised as very high human development,
39 to 83 categorised as high human development)
(3) Transparency International Corruption Perception Index 2007 (ranking out of 180)
(4) The World Bank and IFC, Doing Business 2011
Asulieudystiessed,economieswitl
lowTTRsuienotnecessuiilyugood
modelloiotleieconomies.Wlutis
impoituntislowtletuxsystemlelpsto
lull economic und sociul objectives und
wletlei liglei tuxes ow tliougl to u
betteiquulityollileloicitizens.Tlese
puiticuluieconomiesluvelowTTRs
undcompliuncetime,butliglincome
levelsunduligllumundevelopment
scoie.Tleiigoveinmentspolicies
luvebeentokeeptuxeslowtouttiuct
businessinvestment.
Giventleincieusedlocusonimpioving
tuxcompliunceundtuxcollectionin
developingcountiies,itmuybelelplul
loigoveinmentstolookutexpeiience
inotleieconomies,including
tlesementioned,loimodelsund
goodexumples.
Figure 2.22
TTR by income level
Note: The chart shows the average TTR by income level, using World Bank Group Development Indicators split by type of tax.
Aswelluscuscudingsulestuxes,tleie
uieotleikeypointsoldilleience
betweenTTRsintleEuiopeunUnion
undtleAliicunUnion.Tleuveiuge
coipoiuteincometuxelementolTTRin
tleAliicunUnionut22.2%istleliglest
oltleiegionulgioupsunduboveEuiope
ut13.1%.Lubouituxesundcontiibutions
uiemuclloweiut14.S%inAliicu
compuiedto28.4%inEuiope.Seveiul
economiesinAliiculuveveiylow
levelsollubouituxesundcontiibutions.
EconomiessuclusLesotlound
Etliopiuluvenosuclpuymentslevied
ontleemployeiwlileotleis,suclus
SoutlAliicu,luveulowlevel(2.S%).
AsmentionedintleSoutlAliicun
countiyuiticleinPuyingTuxeslustyeui,
incieusingsociulsecuiitylusbeeniuised
usupiioiitybytleNutionulTieusuiy.
Twocountiies,LibeiiuundKenyu,
piovideunexumpleoltlediveisity
oltuxsystemsinAliicu.Kenyulevies
16tuxesonTuxpuyeiCo,buttwo-
tliids(67%)oltleTTRol49.7%is
tle coipoiute income tux on piot.
LibeiiuleviesninetuxesonTuxpuyeiCo,
includingcoipoiuteincometuxundu
tuinovei tux. Foui-ltls (81%) ol tle
TTRol43.7%isuccountedloibytle
tuinoveitux.Tliscunbesetolluguinst
coipoiuteincometuxdueundieduces
tlistonilloiTuxpuyeiCo.
Figuie2.22setsoutiesultswlen
economiesuiegioupedbyincomelevel,
undslowstluttleuveiugetuxcostis
lowestinligl-incomeeconomies.Tle
pictuieissimiluitotlecompuiison
betweentleAliicunUnionundtle
Euiopeun Union, witl liglei piot tuxes
undloweilubouituxesinlow-income
economiescompuiedtoligl-income
economies.Tosomeextent,tlisol
couise ieects lowei levels ol wuges
undsuluiies,butulso,usweluveseen
inAliicu,lowiutesollubouituxesund
sociulcontiibutions.
The time to comply
Tletimetocomplymeusuiestle
compliuncebuidenloiTuxpuyeiCo.
Contiibutoisineucleconomyuie
uskedtoestimutetletimeneededloi
compliunceuctivitiesuciosstletliee
mujoitypesoltuxesitcomplieswitl.
Tlisincludescoipoiuteincometux;
lubouituxesundsociulcontiibutions
(botltloseleviedontleemployeiund
tloseleviedontleemployee,wlicltle
employeideductstliougltlepuyioll);
undconsumptiontuxes.Compliunce
uctivitiesloieucltypeoltuxuiegiouped
undeitlieeleudingspiepuiingtle
tux guies, completing und ling tle tux
ietuins,undpuyingtletuxes.
High-income
Lower middle-income
Upper middle-income
Low-income
38.8%
40.3%
43.4%
71.0%
As un exumple ol tle culculution, guie
2.23slowstletimetocomplyloiKenyu.
InKenyu,utotulol393louisuieneeded
oineuilytenweeksollull-timewoik
(witlu40-louiweek).Tlemujoiity
oltlistime(276louisoineuilyseven
weeks)isspentonVAT.Splitbytypeol
compliunce uctivity (see guie 2.24),
uioundsevenoltletenweeksuiespent
piepuiing tle tux guies, one und u lull
weeks on completing und ling tle tux
ietuins,undoneundulullweekson
mukingpuyment.
Figuie2.2Sslowslowtletimeto
complyinKenyucompuiestotleuveiuge
loieconomiesintleAliicunUnionund
tlewoilduveiugeiesult.Itiscleuitlut
ittukeslesstimetocomplywitlbotl
coipoiuteincometuxundlubouituxes
inKenyu,tlunonuveiugeintleAliicun
Unionunduioundtlewoild.Howevei,it
tukesconsideiublymoietimetocomply
witlconsumptiontux(wliclinKenyu
isVAT)undmostoltlistimeisspent
piepuiing tle tux guies.
Figure 2.23
Analysis of the hours to comply in Kenya 393 hours
Compliance process
Corporate
income tax Labour taxes VAT
Preparation
Data gathering from internal sources
(for example accounting records)
10 15 30
Additional analysis of accounting information to
highlight tax sensitive items
5 6 24
Actual calculation of tax liability including data inputting
into software/spreadsheets or hard copy records
15 12 96
Time spent maintaining/updating accounting systems for
changes in tax rates and rules
0 0 0
Preparation and maintenance of mandatory tax records
if required
5 0 60
Total 35 33 210
Filing
Completion of tax return forms 5 6 12
Time spent submitting forms to tax authority, which may
include time for electronic ling, waiting time at tax authority
ofce etc
10 6 12
Total 15 12 24
Paying taxes
Calculations of tax payments required including if necessary
extraction of data from accounting records
6 6 36
Analysis of forecast data and associated calculations if
advance payments are required
0 0 0
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)
4 6 6
Total 10 12 42
Grand Total 60 57 276
Note: The table shows the calculation of the hours to comply split between type of tax and compliance activity.
lnkcnyu,uroru|o|
J9Jnoutsisnccdcd
rocomp|yncut|yrcn
wcclso||u||-rimcwotl
Figure 2.24
Hours to comply in Kenya by compliance
activity
Figure 2.25
The hours to comply in Kenya compared to the
African Union and the world average
Note: The chart shows the hours to comply in Kenya by
compliance activity.
Note: The chart compares the hours to comply in Kenya with
the African Union (AU) and world average.
Prepare
File
Pay
278
51
64
Corporate income tax time Labour tax time
Consumption tax time
World average
AU average
Kenya
282
313
393
71 102 109
77 100 135
60 57 276
As slown in guie 2.1 tle uveiuge
timetocomplyloiulleconomiesintle
studyis282louis.Seventy-onelouis
uiespentoncoipoiuteincometux,102
louisonlubouituxesund109louison
consumptiontuxes.Figuie2.26slows
tledistiibutionoliesultsundliglliglts
tluttleieisustiongconcentiutionol
economies(123economies)intleiunge
ol101to3S0louis.Eiglteeneconomies
tukelesstlun100louistocomplywitl
tleiituxesund41economiesneedmoie
tlun3S0louis.Figuie2.27compuies
tlecuiientdistiibutionwitltlutliom
ve yeuis ugo in PuyingTuxcs2006und
slowstledownwuidtiend.InPuying
Tuxcs2006,tleglobuluveiugetimeto
complywus329louistluts47louis
moietlunin2011.Only10Seconomies
weieintleiungeol101to3S0louis
und,inS3economies,tletimeneededto
complywusmoietlun3S0louis.
Figuie2.28liststleeconomiesutbotl
tleloweiendoltleiesults(lesstlun
100louis),undtleligleiend(ovei
SS0louis).Oltle18economieswleie
less tlun 100 louis uie needed, ve uie
oil-iiclstutesintleMiddleEustund
u luitlei ve uie islund stutes. Tlese
tendtoluvelewtuxessolittletimeis
needed.Complyingwitltlepiopeity
tuxesintleMuldives,loiexumple,
tukesonlyulewminutes.Tleiemuining
economies, lowevei, include ve in
Euiope(Estoniu,Iielund,Luxembouig,
SwitzeilundundNoiwuy)plusHong
KongundSingupoie.Someoltleseuie
smulleieconomieswliclluveupositive
locusonliglteningtletuxbuidenon
businessuspuitoltleiieconomicpolicy.
HongKong,Iielund,Luxembouig,
undSwitzeilundulsoluveuTTRwell
belowtlewoilduveiuge.Allseven
economiesscoiewellonquulityollileus
meusuiedbytleUnitedNutionsHumun
DevelopmentIndex.
Note: The chart shows the distribution of results for the time to comply
Note: The chart shows the distribution of results for the time to comply in Paying Taxes 2011 compared to Paying Taxes 2006.
Low time to comply
Region Economy Hours
African Union

Seychelles 76
Djibouti 90
Asia Pacic

Maldives 0
Hong Kong, China 80
Solomon Islands 80
Singapore 84
Europe

Luxembourg 59
Switzerland 63
Ireland 76
Estonia 81
Norway 87
Latin America
and Caribbean
Bahamas, The 58
St Lucia 92
Middle East

Bahrain 36
Qatar 36
Oman 62
Saudi Arabia 79
High time to comply
Region Economy Hours
African Union

Congo, Rep. 606
Cameroon 654
Senegal 666
Mauritania 696
Chad 732
Nigeria 938
Asia Pacic Pakistan 560
Vietnam 941
Central Asia
& Eastern Europe
Armenia 581
Ukraine 657
Belarus 798
Europe Czech Republic 557
Bulgaria 616
Latin America
& Caribbean
Ecuador 654
Venezuela, R.B. 864
Bolivia 1,080
Brazil 2,600
Note: The chart lists economies with low time to comply (less than 100 hours) and high time to comply (greater than 550 hours)
Figure 2.26
Distribution of the time to comply results - In 123 economies compliance activities take between
101 and 350 hours
0
5
0
5
1
1
0
0
1
0
1
1
5
0
1
5
1
2
0
0
2
0
1
2
5
0
2
5
1
3
0
0
3
0
1
3
5
0
3
5
1
4
0
0
4
0
1
4
5
0
4
5
1
5
0
0
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
1
Hours to comply
0
5
10
15
20
25
30
Hours 2011
0
5
10
15
20
25
30
Hours 2006
0
5
0
5
1
1
0
0
1
0
1
1
5
0
1
5
1
2
0
0
2
0
1
2
5
0
2
5
1
3
0
0
3
0
1
3
5
0
3
5
1
4
0
0
4
0
1
4
5
0
4
5
1
5
0
0
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
1
Figure 2.27
The trend in results for the time to comply since the rst study In Paying Taxes 2006 only 105
economies were in the range of 101 and 350 hours
Figure 2.28
List of economies with low and high time to comply by region
Figuie2.29ulsoslowstluttleelements
oltletimetocomplyvuiybyiegion.
IntleEuiopeunUnioneconomies,
compliuncetimeislesstluntlewoild
uveiugeloicoipoiuteincometux(42
compuiedto71louis)undconsumption
tux(72compuiedto109louis).But
moietimeisiequiiedloilubouituxes
(108compuiedto102louis).Itistle
ieveiseintleAliicunUnionwitlless
timeneededonlubouituxes(100louis)
undmoieonbotlcoipoiuteincome
tux(77louis),undconsumptiontux
(13Slouis).IntleOECDcountiies,
compliuncetimeislesstluntlewoild
uveiugeuciossulltlieetuxes.Butin
LutinAmeiicuundtleCuiibbeun,it
tukesmoietimeuciossulltuxes.
As slown in guie 2.1, on uveiuge
uioundtlewoild,ittukesleusttimeloi
ouicusestudycompunytocomplywitl
coipoiuteincometux(71louis),moie
timeloilubouituxesundcontiibutions
(102louis)undtlemosttimeloi
consumptiontux(109louis).Ittukes
evenmoietimewlentleconsumption
tuxisuVAT.148oltle183economies
meusuiedluveuVATtypesulestux
system.Onuveiuge,loitleseeconomies,
ittukes126louisloiVATcompliunce
oineuily64%usmucltimeuguin
usitdoesloicoipoiuteincometux.
VATdoesnotuddtotletuxcostloi
TuxpuyeiCo,butuddsconsideiublytotle
compliuncebuiden.
Economiestlutneedmoietlun
SS0louistocomplyincludelouiin
SoutlAmeiicu,tlieeloimeiSoviet
Republics,twonewmembeisoltle
EuiopeunUnion,sixinAliicu,Pukistun
undVietnum.Tleyslowugeneiully
consistentputteinolmoiebuidensome
iequiiements,needingmoietimetlun
tleuveiugeuciossulltletlieemuin
typesoltux.BulguiiuundtleCzecl
Republicpiovideuninteiestingexumple
oltledilleiencebetweentleoldeiund
neweimembeisoltleEuiopeunUnion.
Botleconomiesiunkwellwitlintlis
economicgioupingontletuxcost(tle
TTRis29%inBulguiiuund48.8%intle
CzeclRepublic).Butulongwitlotlei
newmembeisincentiulEuiope,tley
luvemoietodotoieloimcompliunce
pioceduies.TleCzeclRepubliclus
signicuntly ieduced time to comply ovei
tle lust ve yeuis ( by 373 louis oi nine
weeksolwoik)buttleieisstillpiogiess
tobemude.Tleielusbeennoieduction
duiingtlispeiiodtotletimeneeded
inBulguiiu.
Figuie2.29slowstleuveiugetimeto
complybyiegionulgiouping.Ittukes
tleleusttimetocomplyonuveiuge
intleOECD(209louis)undtle
EuiopeunUnion(222louis),witltle
longesttimeneededinCentiulAsiuund
EusteinEuiope(332louis),tleG20
(370louis),undLutinAmeiicuundtle
Cuiibbeun(38Slouis).
Aioundtlewoild,tleuveiugetimeto
complyluslullenby47louis,oimoie
tlun u duy u yeui since tle ist study ve
yeuisugo.Howeveitlepuceolclunge
doesseemtoluveslowed,witlulull
on uveiuge ol only ve louis since lust
yeui.Tlebiggestclungeintlelustyeui
isintleCentiulAsiuundEusteinEuiope
iegionwleietleuveiugetimeluslullen
by16louis(332compuiedto348lust
yeui).Figuie2.30compuiestleuveiuge
timeintleiegionloitlelusttwoyeuis,
undslowsieductionsintletimeneeded
uciossulltledilleienttypesoltuxes.
Signicunt ieductions in tle time needed
uciossulltuxesinAzeibuijun,Beluius
undUkiuineullectedtleiegionuliesult.
In ull tliee economies, elciencies liom
online ling und puyment ol tuxes puitly
contiibutedtotleieducedtime.
\ATdocsnoruddrornc
ruxcosr|otTuxpuyctCo,
buruddsconsidctub|yro
rnccomp|iuncc butdcn.
Figure 2.29
Comparison of the time to comply by region
Figure 2.30
The trend in time to comply for Central Asia
and Eastern Europe
OECD
European Union
Asia Pacific
World Average
African Union
Central Asia &
Eastern Europe
G20
Latin America
& Caribbean
209
222
233
282
313
332
370
385
2011
2010
332
348
102 108 122
111 111 126
Note: The chart shows the average result for the economies
in each region and the world average of all economies in
the study
Note: The chart compares the average time to comply for
Central Asia and Eastern Europe region between Paying Taxes
2011 and Paying Taxes 2010.
Tletimeneededtocomplywitl
consumptiontuxesvuiiesconsideiubly
uioundtlewoild.Itiungesliomeiglt
louisinSwitzeilundund22louisin
Finlundto480louisinBoliviuund
1,374louisinBiuzil.Ouiunulysisslows
tluttlisdilleiencecunbediivenby
udministiutivepiuctices.Ittukesneuily
utliidusmucltimeuguintocomply
wlenindiiecttuxesuieudministeiedby
usepuiutetuxuutloiityliomcoipoiute
incometux,undoveitwo-tliidsuslong
iltletuxuutloiitiesiequiieinvoices
tobesubmittedwitlVATietuins(see
guie 2.31). It ulso tukes longei wlen
businesslustocomplywitlmoietlun
oneconsumptiontux.Biuzilistle
economywleieittukestlelongesttime
tocomplywitlconsumptiontuxesut
1,374louis.Ittukesulull-timepeison
two-tliidsoltleyeuitocomplywitl
tletlieeconsumptiontuxesielevunt
toTuxpuyeiCowlicluiePIS/COFINS
undIPI(ledeiultuxes)undICMS(stute
tux).Tlestutetuxsystem(ICMS)is
veiycomplexundinvolvescompliunce
obligutionsinulloltle26Biuziliun
stutesintowliclsulesuiemude.
Tletimetocomplyvuiiesbetween
neiglbouiingeconomiesuswellus
uioundtlewoild.Tletimetocomplyloi
economiesintleEuiopeunUnionisset
out in guie 2.32. In tlis iegion, it tukes
222louisonuveiuge,witl42louis
loicoipoiuteincometux,108louisloi
lubouituxesund72louisloiVAT.Tle
iesultsloicompliuncetimeiungeliom
S9louisinLuxembouigto616louis
inBulguiiu.
Lubouituxesundsociulcontiibutions
uietlemosttime-consumingbuidenin
tleEuiopeunUnion.Altlougltletime
neededloilubouituxeslusieducedby
ve louis liom lust yeui, it is still ubove
tlewoilduveiugetimebysixlouis.In
tleeconomieswitltleliglesttime
neededloilubouituxes,tleietends
tobemultiplelubouituxesundsociul
contiibutionstocomplywitl.Tleseven
economieswlicltuketlemosttime
(Hunguiy:146louis,Poitugul:162
louis,Lutviu:16Slouis,Finlund:200
louis,Ituly:214louis,CzeclRepublic:
262louis,undBulguiiu:288louis)
luveonuveiugetwiceusmunyluboui
tuxesustleeconomieswlicltuketle
leusttime(Luxembouig:14louis,
Estoniu:34louis,Sweden:36louis,
Iielund:36louis,Belgium:40louis,
UK:4Slouis,undGieece:48louis).
Luxembourg
Ireland
Estonia
United Kingdom
Sweden
France
Netherlands
Denmark
Cyprus
Belgium
Austria
Lithuania
Spain
Germany
Romania
Greece
Finland
Slovak Republic
Slovenia
Hungary
Italy
Latvia
Portugal
Poland
Czech Republic
Bulgaria
59
76
81
110
122
132
134
135
149
156
170
175
197
215
222
224
243
257
260
277
285
293
298
325
557
616
Corporate income tax time Labour tax time Consumption tax time
EU average 222 World average 282
Figure 2.32
Number of hours to comply across the European Union
Note: The chart shows the hours to comply for the economies in the EU split by type of tax compared to the EU and
world average.
Figure 2.31
Administrative practices signicantly impact the time to comply for consumption taxes
Indirect taxes administered by separate authority
Invoices required to be submitted with VAT returns
Yes
No
143
109
Average time to comply with consumption taxes
Yes
No
153
90
Average time to comply with consumption taxes
Note: The charts compare the average time to comply where (1) separate authorities administer indirect taxes and corporate
income tax and (2) where invoices have to be submitted with VAT returns.
VulueAddedTux(VAT)isnowtle
mostcommonloimolconsumptiontux
systemuseduioundtlewoild.Howevei,
wliletlepiinciplesolVATuiesimilui
eveiywleie,tlecompliuncebuiden
onbusinessvuiiesconsideiubly.Tlis
isevidentintleiesultsoltlePuying
Tuxesstudies.
PwClusiecentlyundeitukensome
luitleiieseuicltolookinmoiedetuilut
tledilleiencesintletimeiequiiedloi
VATcompliunceindilleientcountiies,
undtogosomewuytoundeistunding
wlutdiivestlis.Inudditiontodutu
collecteduspuitoltlePuyingTuxcs
2010study,luitleidutuwuscollected
liom30oltle14Seconomiesintle
studywliclluduVAToisimiluivulue
uddedconsumptiontuxsystem.Tlese
economiesweieiepiesentutiveucioss
tleiungeoliesultsloitletimeiequiied
loiVATcompliunceuctivities.
Tleiesultsoltleieseuicluieuvuiluble
utwww.pwc.co.uk/pdl/PwC_VAT_
Compliunce_suivey_2010.pdl
Insummuiy,tleiesultsslowtlut:
Onuveiugeittukestlecusestudy
compunylongeitocomplywitlVAT
tlunitdoestocomplywitlcoipoiute
incometux.
Tletimeneededtocomplyvuiies
consideiublyuioundtlewoildeven
betweenneiglbouiingcountiies.
VATcompliuncetendstotukeless
timeincountiieswleietletux
isudministeiedbytlesumetux
uutloiityustleonewlicldeuls
witlcoipoiuteincometux(see
guie2.31).
Onuveiugeittukeslesstimeto
complywleiecompuniesuseonline
ling und puyment loi VAT.
TleliequencyundlengtlolVAT
ietuinsimpuctstletimeittukes
tocomply.
Tleiequiiementtosubmitinvoices
oiotleidocumentutionwitltle
ietuinuddstocompliuncetime(see
guie 2.31).
Ouiieseuiclslowstlutdilleient
udministiutivepiucticesundtlewuy
inwliclVATisimplementeduiekey
ieusonsloitlewideiungeinlouis
tlutittukesouicusestudycompuny
tocomplywitlVATiequiiements.
Stieumliningtlecompliuncebuiden
undieducingtletimeneededto
complyisimpoituntloiVATsystemsto
woikelciently.
The impact of VAT
compliance on business
Comment:VATcompliunce
The time needed varies by region
It takes less time on average in countries
where business uses online ling and payment
The frequency at which VAT returns are
required impacts the time to comply
The more extensive/long the tax returns, the
more time is needed
European Union
Middle East
Asia Pacific
Global Average
Africa
Average hours to comply 0 50 100 150 200
73
83
123
125
130
135
192
Note: Chart shows the average time needed to comply with VAT for economies in each economic/geographic region and the
world average for all economies with a VAT.
Source: Paying Taxes 2010, PwC analysis
Yes (16 economies)
No (14 economies)
95
136
Monthly
(23 economies)
Bi-monthly/Quarterly
(7 economies)
125
81
0-20 boxes
(12 economies)
Over 20 boxes
(16 economies)
6
13
Note: Chart compares the average time to comply with VAT
for economies in the sample group where business of the size
and nature of the case study company le and pay VAT online.
Note: Chart shows the average time needed to comply
in economies in the sample group depending on whether
VAT returns are required to be made monthly, bi-monthly
or quarterly.
Note: Chart shows the average time to comply per return for
economies in the sample, depending on the number of boxes
in the return which need to be completed.
Figuie2.33compuiestletimeneeded
tocomplywitlsevenlubouituxesund
sociulcontiibutionsinHunguiywitltle
singlesociulcontiibutionintleUK,und
ulsowitltleEuiopeunUnion.Ittukes
consideiublylongeiinHunguiyucioss
ulluieusolcompliunceuctivities.
Figuie2.34slowstluttlenumbeiol
louistocomplyiungeswidelyintle
AliicunUnionliom76louisintle
Seyclellesto938louisinNigeiiu.In
Nigeiiu,ittukesouicompuny938louis
oi23weeksolwoik(40louisuweek)
tocomplywitlitstuxulluiis.398louis
uieneededoncoipoiuteincometux,378
louisonlubouituxesund162louison
consumptiontuxes.OnlyinVietnum,
Boliviu,undBiuzildoestlecompuny
needmoielouistocomply.
IntleAliicunUnion,tleuveiugetime
tocomplyol313louisis31louisubove
tlewoilduveiuge,luigelyduetomoie
timebeingneededonconsumption
tuxes(onuveiuge13Scompuiedto
109louis).Twenty-seveneconomies
inAliicuneedmoietimetluntle
globuluveiugetocomplywitltleii
consumptiontuxes.Tleeconomies
wleietlemosttimeisneededuie
Muuiituniu(480louis),Senegul(4S0
louis),Cumeioon(300louis),Numibiu
(288louis)undKenyu(276louis).All
tleseeconomiesluveVAT.Figuie2.3S
slowstluttlecompliunceuctivities
to piepuie tle tux guies tuke up tle
mosttime.
LutinAmeiicuundtleCuiibbeunistle
iegionwleieittukestlelongesttimeto
comply.Lookingutjusttlecontinentul
economies ol Soutl Ameiicu in guie
2.36,ittukesonuveiuge641louis(oi
16weeks).Tlisisbyluitleliglest
timeloiunyiegion.Tenoltletwelve
economiesuieubovetlewoilduveiuge
ol282louis.Inlouieconomies,moie
tlun600louisuieneeded.InBiuzil,it
tukestlelongesttimeintlewoild.
Figure 2.34
Number of hours to comply across the African Union
Figure 2.33
Time to comply with labour taxes in Hungary and the UK compared to the EU average
Seychelles
Djibouti
Comoros
Swaziland
Zambia
Tunisia
Rwanda
Botswana
Malawi
Liberia
Mauritius
Uganda
Tanzania
Sudan
Cape Verde
Ethiopia
South Africa
Madagascar
Guinea-Bissau
Burundi
Eritrea
Ghana
Mozambique
Zimbabwe
Benin
Burkina Faso
Cte d'Ivoire
Mali
Niger
Togo
Angola
Lesotho
Congo, Dem. Rep.
Sierra Leone
Namibia
Gambia, The
Kenya
Guinea
So Tom and Principe
Egypt, Arab Rep.
Algeria
Gabon
Equatorial Guinea
Central African Republic
Congo, Rep.
Cameroon
Senegal
Mauritania
Chad
Nigeria
76
90
100
104
132
144
148
152
157
158
161
161
172
180
186
198
200
201
208
211
216
224
230
242
270
270
270
270
270
270
282
324
336
357
375
376
393
416
424
433
451
488
492
504
606
654
666
696
732
938
World average: 282 African Union average: 313
EU
Hungary
UK
108
146
45
60 24 24
80 42 24
17 27 1
Prepare File Pay
Note: The chart compares the time to comply with labour taxes in Hungary and the UK compared to the EU average.
Note: The chart shows the hours to comply for the economies in the AU split by type of tax compared to the AU and world average.
Figuie2.37slowsubieukdownollouis
inVenezuelucompuiedtotlewoild
uveiuge.InVenezuelu,ittukestwo-tliids
moietimetocomplywitlcoipoiute
incometuxtluntlewoilduveiuge,und
tlieeundululltimesuslongloibotl
lubouituxesundconsumptiontux.Tle
iequiiementtokeepmundutoiybooks
solelyloituxuddstotletimeneeded.
InVenezuelu,348louisoutoltle
totulol864uietukeninpiepuiingund
muintuiningtuxbooks(40%oltletotul
time).Figuie2.38slowstleuveiuge
timeuciossulleconomiesieducesby89
louis,oi11duys,wlennoextiubooks
undiecoidsuieiequiiedjustloitux.
As slown in guie 2.39, it tukes less time
tocomplyinligl-incomeeconomies
(witlunuveiugetimeol172louis)
tluninotleilessweultlyeconomies.
Tlisuppliesuciossulltlieetypesol
tuxes.Tledilleienceisntuiesultol
luvingleweituxestocomplywitl
(tleuveiugenumbeioltuxesis9.3
loiligl-incomecountiiesund10loi
low-incomecountiies).Insteud,tlisisu
ieection ol moie mutuie tux systems, u
liglteiudministiutivetoucl,undmoie
useoltleelectionicinteilucebetween
tuxpuyeisundtuxuutloiitiesintleligl-
incomeeconomies.Tleliglesttime
neededtocomplyisinlow-incomeund
loweimiddle-incomeeconomies.
Figure 2.38
The requirement to keep mandatory books solely
for tax purposes adds to the time to comply
Figure 2.37
Comparison of hours to comply in Venezuela
with the world average
Type of tax
World
average Venezuela
Corporate income tax time 71 120
Labour tax time 102 360
Consumption tax time 109 384
Total 282 864
Note: The table compares the time to comply in Venezuela to
the world average.
Note: The chart shows that the time needed to comply is
much higher if mandatory books are required solely for tax
purposes.
Are mandatory books required?
Yes
No
308
219
Average time to comply
Figure 2.39
Hours to comply by income level
Note: The chart shows the average hours to comply by income level using the World Bank Group Development indicators, split
by type of tax.
High-income
Upper middle-income
Low-income
Lower middle-income
172
272
295
359
Figure 2.35
Time to comply with VAT in selected African economies compared to the world average
Figure 2.36
Hours to comply in South American economies
Note: The chart compares the time to comply with consumption taxes in selected African economies split by type and
compliance activity compared to the world average for consumption tax systems.
Note: The chart shows the hours to comply for the economies in South America, split by type of tax compared to the South
America and world average
World
Kenya
Namibia
Cameroon
Senegal
Mauritania
109
276
288
300
450
480
Prepare File Pay
Suriname
Colombia
Guyana
Paraguay
Chile
Uruguay
Peru
Argentina
Ecuador
Venezuela, R.B.
Bolivia
Brazil
199
208
288
311
316
336
380
453
654
864
1,080
2,600
World average 282 South America average 641
TlePuyingTuxesiesultsmeusuiebotl
tlecostoltuxesundtlecompliunce
buidenloibusiness.Tleindicutoi
doesnotloweveicoveiulluspects
oltuxudministiutionundlow,loi
exumple,tledilleientuppiouclesoltux
uutloiitiescunimpuctbusiness.Oveitle
lusttlieeyeuis,ulistolsupplementuiy
(non-indicutoi)questionslusbeen
developed,witltlelelpolinteiested
puities,unduddedtotlePuyingTuxes
questionnuiie.Tleiesponsesuieused
topiovideluitleiinsigltsintotux
udministiution.
Contiibutoisuioundtlewoilduie
uskedtogivetleiiviewsonunumbeiol
udditionuluspectsoltuxudministiution
suclus:tlecluiityoltletuxiulesund
lelplulnessolguiduncenotesissued;
lowlongisitlikelytotuketoieceiveu
tux ielund; und low eusy oi dilcult it
istodeulwitlutuxuudit.Lustyeui,u
selectionoliesultsliomPwCsunulysis
wusincludedintlePuyingTuxcs2010
study.Tlisyeui,ouiintentionisto
publisltleiesultssepuiutelyin2011.
Howevei,weincludeleieusmull
pieviewolouiunulysis.
Contiibutoisweieuskedtoexpiessu
viewon:Howsimpleoicomplicuted
uietletuxiulesinyouicountiy?41%
oleconomiesiespondedtluttleiules
uieveiysimpleoisimpleund44%
tluttleyuiecomplexoiveiycomplex
(1S%oleconomiesdidnotunswei).
Coiielutingtleseiesultstotlelouis
neededloicompliunceuctivitiesslows
tlutcompliuncetimeiisesby40%on
uveiugewleietuxiulesuiecomplex.
Contiibutoisweieulsouskedwletlei
dilleienttuxesleviedontlecompuny
weieudministeiedbytlesumeoi
sepuiutetuxuutloiities.80%oltle
economiesiespondingsuidtlutindiiect
tuxesuieudministeiedbytlesumetux
uutloiityuscoipoiuteincometux-so
tlisseemstobeubestpiuctice.Figuie
2.31slowstluttleuveiugetimeto
complyiisesby31%intleeconomies
wleietleieisusepuiuteuutloiity
loiindiiecttuxes.Conveisely,7S%
oleconomiessuidtlutsociulsecuiity
contiibutionsuieudministeiedbyu
sepuiutetuxuutloiity.Intliscuse,tle
uveiugecompliuncetimeisulsolongei
by30%.
Tletuxuutloiityiequiiementtokeep
mundutoiybookssolelyloitux,oi
tosubmitudditionuldocumentution
witltuxietuins,ulsouddstotle
compliuncebuiden.Figuie2.38slows
tlutmundutoiybooksincieusetle
uveiugecompliuncetimeby41%.Figuie
2.31slowstlutittukes70%moietime
tocomplywleninvoicesluvetobe
submittedwitlVATietuins.
The impact of tax
administration on
business
Comment:Tuxudministiution
It takes longer to comply where tax rules
are complex
Note: The chart compares the time to comply in economies
where contributors consider tax rules are (1) simple and very
simple and (2) complex and very complex.
Source: PwC analysis of non-indicator data
Simple tax rules
Complex tax rules
249
346
Average hours to comply
Tleuppioucloltletuxuutloiities
isunuieutlutconceinscontiibutois
uioundtlewoild.In102economies
(67%oltloseiesponding)contiibutois
suidtluttlisisunuieuoltleiitux
systemtlutneedstobeimpioved.As
one meusuie ol tle elciency ol tux
uutloiities,weulsousked:Inutypicul
situution,lowlongisitlikelytotukein
piucticeloiucompunytoieceiveuVAT
oiwitlloldingtuxielund?Tleiesults
slowtlutittukestleleusttimeintle
luige,developedeconomies,witl83%
olOECDeconomiesiespondingtlut
itwouldtypicullytuketlieemontls
oiless.Ittukeslongestintleless
developedeconomiesolLutinAmeiicu
&CuiibbeunundtleAliicunUnion.
24%oleconomiesiespondinginLutin
AmeiicuundtleCuiibbeun,und32%in
tleAliicunUnion,suiditwouldtypicully
tukemoietlunuyeui.Ineconomies
wleieittukeslongeitoieceiveu
ielund,itulsotendstotukelongei
loi compliunce uctivities (see guie
2.29-compuiisonollouistocomply
byiegion).
Deulingwitltuxuuditsunddisputes
istleuieuoltleiituxsystemtlut
contiibutoisuioundtlewoildmost
wunttoimpiove.Atuxuuditcunbetle
most dilcult inteiuction tlut u business
luswitltletuxuutloiitiesund120
economies(79%oltloseiesponding)
suidtlisuieuoltleiituxsystemneeds
impiovement.61%olulltleeconomies
intlestudysuidtlut,intleiiopinion,
deulingwitlutuxuuditintleiicountiy
wus dilcult oi veiy dilcult.
Anindependentundellectiveuppeul
piocessiscleuilyunimpoituntuspect
olgoodtuxudministiutionliomtle
tuxpuyeispeispective.Contiibutoisin
7%oltleeconomiessuidtleieisno
independentbodytowliclutuxpuyei
cunuppeuluguinstutuxuutloiitys
decision,und12%didnotunsweitlis
question.Andintleeconomieswleie
tleieisunindependentpiocess,it
is olten consideied to be inelcient.
Ineconomieswleietlepiocessis
consideied to be elcient, tux uudits uie
eusiei.48%olcontiibutoisineconomies
wleietleindependentuppeulpiocess
is elcient suid deuling witl u tux uudit
wuseusyoiveiyeusy,compuied
toonly1S%ineconomieswleietle
independentpiocessisconsideiedto
beinelcient.
Tledutupiovidediniesponsetotle
listolsupplementuiy(non-indicutoi)
questionsisnotusedtoculculutetle
iesultsloiPuyingTuxes.Butwesuggest
tlutitcunbeusedtopiovideudditionul
insigltsintotuxsystemsundtux
udministiution,undcunpotentiullylelp
goveinmentsustleyieviewtleiiown
systemsundpiioiitiseuieusloiieloim.
Anulysisoltlesupplementuiydutuis
ongoingundwillbepublisledin2011.
How long is it likely to take in practice for a company to receive a refund
In your opinion, how easy is it for a company
to deal with a tax audit in your country?
In your opinion, how efcient is the
independent appeal process in your country?
OECD
European Union
World average
Asia Pacific
African Union
Less than one month 1 to 3 months 3 to 6 months 6 to 12 months More than one year No data supplied
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Note: Results for all economies in the study and for selected regions
Note: Results for all economies in the study
Note: Results for economies in the study reporting an
independent appeal process
Very easy (2%)
Easy (21%)
Difficult (45%)
Very difficult (16%)
No data supplied (16%)
Very efficient (5%)
Efficient (30%)
Inefficient (48%)
Very inefficient (17%)
The number of payments
Tlenumbeiolpuymentsmeusuies
tlenumbeioltimestlecusestudy
compunylustopuytuxesintleyeui
undlowitmukestlesepuyments.It
includesulltuxes,wletleitleseuie
leviedontlecompuny,oilikeVAT,uie
udministeiedbyit.Itpiovidesumeusuie
oltlenumbeioltuxeswliclmustbe
compliedwitl.Itulsotukesintouccount
tlemetlodolpuymentundtleuseol
electionic ling und puyment. Wleie tle
mujoiityolbusinesses,likeTuxpuyeiCo,
le und puy tleii tuxes online in
uneconomy,tlenumbeioluctuul
puyments is ieduced to one, to ieect
tle elciencies ol going electionic. Also,
wleietuxesuiepuidtliouglutliid
puity,sucluslueltuxpuidtotleluel
distiibutoi,tlenumbeiolpuyments
is tuken us one to ieect tle luck ol
compliuncebuiden.
Asunexumpleoltlenumbeiol
puyments, guie 2.40 slows tle
culculutionloiPeiu.TuxpuyeiComukes
montllypuymentsolcoipoiuteincome
tux,sociulsecuiitycontiibutions,
industiiulcoipoiutionscontiibution,
undVAT.Howevei,tleseuieullieduced
toonepuymentpeituxintleindicutoi
to ieect tle stutus ol online ling und
puymentinPeiu.Tleiemuiningtuxes
uieeitleipuidunnuully(loiexumple,
ieulestutetux),puidjointly(netussets
tuxwitlcoipoiutionincometux)so
tlutnosepuiutepuymentisiequiied,oi
uieembeddedinupuymenttoutliid
puity(lueltux).Ouicompunymukes
S4uctuultuxpuymentsintleyeui,but
tlisisieducedtonineloitlenumbeiol
puymentsindicutoi.
Figuie2.41slowstlenumbeiol
puymentsloiPeiubytypeoltux.Figuie
2.42compuiestleiesultloiPeiu
witltlutloiotleieconomiesinLutin
AmeiicuundtleCuiibbeunundtle
woilduveiuge.Itslowslowtleiesults
loiPeiuuieluvouiublyullectedbytle
stutus ol online ling und puyment.
As slown in guie 2.1, tle uveiuge
numbeiolpuymentsloiulleconomies
in tle study is 29.9 - 3.7 loi piot
tuxes,12.1loilubouituxesundsociul
contiibutions,und14.1loiotleituxes.
Figuie2.43slowstledistiibutionol
tleiesultsloitlenumbeiolpuyments
uciossull183economies.Tleieisu
lesseiconcentiutionoliesultstlunloi
tleotleitwosub-indicutois,butugood
piopoitionoleconomieslullwitlin
tleiungeol6to3Spuyments(116
economiesoitwo-tliidsoltletotul).Six
economiesluveleweitlunsixpuyments
und61economiesluvemoietlun3S.
Figuie2.44compuiestledistiibution
oliesultswitltloseinPuyingTuxcs
2006undslowstledownwuidtiend.
InPuyingTuxcs2006,tleglobuluveiuge
numbeiwus33.8puyments.Fiveyeuis
ugo,only97economiesweieintle
iungeol6to3Spuyments.
Figuie2.4Sliststleeconomiesuttle
loweiendoltleiesults(witllesstlun
ve puyments) und tle liglei end
(witlmoietlun70puyments).Tlese
piovideuselulexumplesoltleimpuct
ontleiesultsloitlisindicutoiolbotl
tlenumbeioltuxeslevied,undtle
elciencies ol online ling und puyment.
Figure 2.40
The number of payments calculation for Peru

World Bank
Indicator
Actual
payments Notes
Corporate income tax 1 13 Online
Net assets tax (ITAN) 0 1 Paid jointly
Social security contributions 1 12 Online
Industrial corporations contribution 1 12 Online
Value Added Tax 1 12 Online
Financial transactions tax 1 1 Embedded payment
Real estate tax 1 1 Annual payment
Vehicle tax 1 1 Annual payment
Arbitrios 1 1 Annual payment
Fuel tax 1 On each refuelling Embedded payment
Total 9 54
Note: The table shows an example of the calculation of the number of payments for Peru
Figure 2.41
The number of payments for Peru
Figure 2.42
The number of payments for Peru compared
to Latin America and the Caribbean and
world average
Profit tax (1)
Labour tax (2)
VAT (1)
Other taxes (5)
Note: The chart shows the number of payments for Peru split
by type of tax
Note: The chart compares the number of payments for Peru
with the Latin America and the Caribbean and world average.
Latin America
& Caribbean
World
Peru
33.2
29.9
9
4.3 13.2 15.7
3.7 12.1 14.1
1 2 6
rnctcsu|rs|otPctu
utc|uvoutub|yu||ccrcd
byrncsruruso|on|inc
|ingundpuymcnr
Aspieviouslymentioned,Sweden
lollowsbestpiucticeundleviesjustone
tux pei buse. Foui ol tle ve tuxes uie
jointly led und puid online, iesulting
injusttwopuymentsloitlenumbeiol
puymentsiesult-tlelowestintlewoild.
Noiwuylollowsusimiluiuppiouclwitl
justlouituxes(coipoiuteincometux,
sociulsecuiitycontiibutions,VATund
lueltux)undlouipuyments.Muldives
undQutuiluvelewtuxesundtleieloie
lewpuyments,undHongKongdoesnot
levyuconsumptiontuxonTuxpuyeiCo.
Incontiust,economiesuttleligleiend
oltleiesultslevynumeioustuxes(12.6
on uveiuge). And electionic ling und
puymentiseitleinotuvuilubleoinot
widelyused.Foiexumple,inRomuniu,
tlecompunypuys17dilleienttuxes
wlicliswellubovebotltlewoild(9)
undEuiopeunUnion(11)uveiuges.
Tlecompunymukesmontllypuyments
loiVATundloieuclolsevendilleient
lubouituxes.Itulsomukesquuiteily
puymentsloicoipoiuteincometux
und13otleipuymentsuciosseiglt
otleituxes.Tleieisnoieductionin
tleuctuulnumbeiolpuymentsus
tleieisnoelectionicinteilucewitl
tletuxuutloiities.Reguluipuyment
ol(tleieloiesmulleiumountsol)tuxes
cun piovide ieul cusl ow benets
tobusinesseslikeTuxpuyeiCound
ulsoussistgoveinmentievenues.But
multipletuxespeibuseuieunudditionul
compliuncebuiden.Electionicinteiluce
cun piovide ieul benets to botl business
undgoveinment.
Figuie2.46slowstleuveiugenumbei
olpuymentsbyiegionulgiouping.Tle
lowestuveiugenumbeiolpuymentsis
loundintleOECDeconomies(13.2),
G20economies(1S.4)undtleEU(17.S),
wlileLutinAmeiicuundtleCuiibbeun
(33.2),tleAliicunUnion(36.2)und
CentiulAsiuundEusteinEuiope(4S.3),
ullluveiesultsubovetlewoilduveiuge.
Figure 2.46
Comparison of number of payments by region
Note: The chart shows the distribution of results number of payments
Note: The chart shows the distribution of results for the number of payments in Paying Taxes 2011 compared to in Paying Taxes 2006.
Figure 2.43
Distribution of the number of payments results
In 116 economies there are between 6 and 35 payments.
0
5
6
1
0
1
1
1
5
1
6
2
0
2
1
2
5
2
6
3
0
3
1
3
5
3
6
4
0
4
1
4
5
4
6
5
0
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
Number of payments
0
5
10
15
20
25
30
0
5
6
1
0
1
1
1
5
1
6
2
0
2
1
2
5
2
6
3
0
3
1
3
5
3
6
4
0
4
1
4
5
4
6
5
0
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
Number of payments 2011
0
5
10
15
20
25
30
Number of payments 2006
Figure 2.44
The trend in results for the number of payments since the rst study
In Paying Taxes 2006, only 97 economies were in the range 6 to 35 payments
Low number of payments
Region Economy Payments
Asia Pacic Hong Kong, China 3
Maldives 3
Europe Norway 4
EU Sweden 2
Middle East Qatar 3
High number of payments
Region Economy Payments
Central Asia
& Eastern Europe
Montenegro 77
Belarus 82
Ukraine 135
EU Romania 113
Latin America
& Caribbean
Jamaica 72
Note: The chart lists economies with a low number of payments (less than ve) and a high number of payments (greater than 70)
Note: The chart shows the average result for the economies in each region and the world average for all economies in the study.
OECD
G20
European Union
Asia Pacific
World Average
African Union
13.2
15.4
17.5
24.6
29.9
33.2
36.2
45.3
Figure 2.45
List of low and high number of payments economies by region
A compuiison ol guie 2.7 (tle uveiuge
numbei ol tuxes by iegion) und guie
2.46(tleuveiugenumbeiolpuyments
byiegion)slowscleuilytluttleieuson
wlytleluigei,oimoiedeveloped
economies,luveleweipuymentsisnot
tluttleyluveleweituxes.TleG20,
OECDundEuiopeunUnionullluveun
uveiugenumbeioltuxesubovetlewoild
uveiuge,wlileLutinAmeiicuundtle
Cuiibbeun,undCentiulAsiuundEustein
Euiopeuiebelowtlis.Tleieusonis
tluttleluigeiundmoiedeveloped
economiesuiemoieudvuncedinteims
ol online ling und puyment. In tle
EuiopeunUnion,loiexumple,onlytliee
economiesdonotluveieducediesults
uciossulltlemuintuxesduetoonline
ling und puyment.
Tleiesultsloitlenumbeiolpuyments
ulsovuiywitlinuiegion,diivenbytle
numbeioltuxesleviedundonlinestutus.
Figuie2.47slowstleiungeoliesults
inLutinAmeiicuundtleCuiibbeun.At
33.2puyments,tleiegionuliesultis
sligltlyubovetlewoilduveiuge,buttle
iesultsiungeliom6puymentsinMexico
to72inJumuicu.PeiuundJumuicu
piovideugoodexumple.InPeiu,tle
compunypuysninetuxes,usslownin
guie 2.41, but tle numbei ol puyments
isieducedliomtleuctuulnumbeiol
S3to9loitlesub-indicutoi.InJumuicu
tlecompunypuys14dilleienttuxesund
tleieisnoieductionintlenumbeiol
uctuulpuymentsmudeol72.Tleielus
been no clunge to tle guies in Jumuicu
intlesixyeuisoltlestudy.BotlPeiu
undJumuicuslowlowtuxesotlei
tluntlemuintlieetypes(coipoiute
incometux,lubouituxes,VAT)uddto
tleiesults.InPeiutleieuiesixotlei
tuxes iequiiing ve puyments. And,
inJumuicu,nineotleituxesiequiie
20puyments.Figuie2.48slowstle
numbeiolpuymentsloiJumuicubytux.
Figure 2.47
The number of payments in the Latin America and Caribbean region
Mexico
Ecuador
Argentina
Chile
Dominican Republic
Peru
Brazil
Puerto Rico
Suriname
Bahamas, The
Colombia
Guatemala
St. Kitts and Nevis
Grenada
St. Lucia
St. Vincent and the Grenadines
Guyana
Paraguay
Dominica
Belize
Trinidad and Tobago
Bolivia
Costa Rica
Haiti
Honduras
El Salvador
Uruguay
Antigua and Barbuda
Panama
Nicaragua
Venezuela, R.B.
Jamaica
6
8
9
9
9
9
10
16
17
18
20
24
24
30
32
32
34
35
38
40
40
42
42
42
47
53
53
56
62
64
70
72
World average: 29.9 Latin America & Caribbean average: 33.2
Note: The chart shows the number of payments for economies in Latin America and Caribbean compared to the regional and
world average.
rnctcusonwnyrnc
|utgct,otmotcdcvc|opcd
cconomics,nuvc
|cwctpuymcnrsisnor
rnurrncynuvc|cwct
ruxcs,burrnurrncy
utcmotcudvunccdin
rctmso|on|inc|ing
und puymcnr
Tlewoilduveiugenumbeiolpuyments
loiulleconomiesintlestudyluslullen
by0.6intlelustyeui.Tleiegiontlut
lusseentlebiggestclungeintle
lustyeuiisCentiulAsiuundEustein
Euiopewleietleuveiugenumbeilus
lullenby4.2.Tlislusbeendiivenbyu
ieductioninpuymentsolotleituxes.
Figuie2.49compuiestleuveiuge
numbeiolpuymentsintlisiegionloi
tle lust two yeuis. Signicunt ieductions
luvebeenmudeinBeluius,tleKyigyz
RepublicundMontenegio.InBeluius,
tlenumbeiolpuymentslellustle
liequencyolpuymentieducedliom
montllytoquuiteilyloiseveiultuxes,
includingpiopeitytux,ecologicultux
undtletiunspoitduty.Also,electionic
systemsbecumemoiewidelyusedin
BeluiusloiVAT,coipoiuteincometux
undlubouituxes.IntleKyigyzRepublic,
tlenumbeiolpuymentsiequiiedloi
coipoiuteincometux,piopeitytuxund
lundtuxweieieduced.InMontenegio,
tleeliminutionolconstiuctionlund
tuxundtleiequiiementsloiudvunce
puymentsloicoipoiuteincometux
ieducedtlenumbeiolpuyments.
Figuie2.S0slowstluttleligl-income
countiiestendtoluvetlelowest
numbeiolpuyments,uswellustle
lowesttimeneededtocomply,undtle
lowesttuxcost.Asulieudymentioned
tlisdoesnotiesultliomuloweinumbei
oltuxes,butliomumoieudvunced
stutus ol online ling und puyment.
Low-incomecountiiesluvetleliglest
numbeioltuxpuyments.
Figure 2.48
The number of payments for Jamaica by tax
Figure 2.50
Number of payments by income level
Vehicle tax (2)
Annual return filing fee (1)
Asset tax (1)
Fuel tax (1)
Property tax (1)
Property transfer tax (1)
Stamp duty (1)
Education Tax (12)
National
Housing
Trust (12)
Payroll tax
HEART (12)
Social security
contribution
National Insurance
(12)
Value added tax
(VAT) (12)
Other (8)
Corporate income tax (4)
Note: The chart shows the number of payments for Jamaica
split by type of tax.
Figure 2.49
The trend in number of payments for Central
Asia and Eastern Europe
2011
2010
45.3
49.5
7.2 18.2 19.9
8.0 17.5 24.0
Note: The chart compares the average number of payments
for the Central Asia and Eastern Europe region between
Paying Taxes 2010 and Paying Taxes 2011.
Note: The chart shows the average number of payments by
income level, using the World Bank Development indicators,
split by type of tax.
High-income
Upper middle-
Income
Lower middle-
Income
Low-income
14.5
30.8
34.7
37.9
Paying taxes getting easier
Puyingtuxeslusgoteusieiuioundtle
woild. Ovei tle lust ve yeuis, tle globul
uveiugeTTRluslullenbyS.9%(moie
tlun1%euclyeui),tletimetocomply
by47louis(moietlunninelouis
euclyeui)undtlenumbeiolpuyments
byloui.
Most change in Central Asia and
Eastern Europe
Intlelustyeui,tlebiggestclungewus
inCentiulAsiuundEusteinEuiope
wleietleTTRdioppedby3.1%,tle
timetocomplyby16louis,undtle
numbei ol puyments by ve.
Corporate income tax only part of
the burden
Coipoiuteincometuxisonlypuitoltle
buidenoltuxesonbusiness.Aioundtle
woild,tlecompunypuysonuveiuge9.4
tuxes.Coipoiuteincometuxuccounts
loijust12%oltletuxpuymentsmude,
2S%oltlecompliuncetime,und38%ol
tleTTR.
What the results show
One tax per base is best practice
Someeconomieslevymultipletuxes
peituxbuseundtliscunincieusetle
compliuncebuidenonbusiness(tle
timetocomplyundtlenumbeiol
puyments).Levyingonetuxpeibuseisu
bestpiuctice,undS0economiesdotlis.
Huvingonetuxpeibusedoesnotullect
tleleveloltuxesiuised.
Low TTRs are not necessarily a
good model
TleuveiugeTTRinPuyingTuxesis
47.8% ol commeiciul piots. Economies
witlloweiTTRsuienotnecessuiily
tlebetteimodel.Wlutisimpoitunt
istluttuxesuiewellspenttopiovide
ustublebusinessenviionment,good
inliustiuctuieundbetteiquulityollile
loicitizens.
TTR highest in the African Union
TleAliicunUnionlustleliglest
uveiugeTTR,diivenbycostlycuscuding
sules tuxes in ve economies. In tle
AliicunUnion,coipoiuteincome
tuxisulsotleliglestpeicentugeol
commeiciul piots, but employei tuxes
undsociulcontiibutionsuiebelowtle
woilduveiuge.
Statutory corporate income tax
is not a good indicator of tax
actually paid
Tlestututoiyiuteolcoipoiuteincome
tuxisoltennotugoodindicutoioltle
iuteoltuxpuid.Wemeusuieuctuultuxes
puid,undpiovideexumplesolieductions
intleiutepuidduetogeneious
ullowunces,undincieuseswleie
businessexpensesuienotdeductible.
Labour taxes highest % of TTR in
the EU
Lubouituxesundcontiibutionslevied
ontleemployeiuietleliglest
peicentuge ol commeiciul piots in tle
EuiopeunUnion.Tleymukeuptle
mujoiityoltleTTRinmunyEuiopeun
Unioneconomies.
Seven weeks to comply with the
three major taxes
Onuveiugeittukes282louis,oiseven
weeksollull-timewoik,tocomply
witltletlieemuintypesoltuxes.Tlis
luslullenbyonlylouilouisintle
lustyeui,suggestingtluttleiuteol
ieloimintlisuieulussloweduiound
tlewoild.Wesuggesttlutevenmoie
locusneedstobegiventoieducingtle
compliuncebuiden.
Over 29 payments made on average
each year
Tlenumbeiolpuymentsindicutoi
meusuiestlenumbeioltimestle
compunylustopuytuxesintleyeui
undlowitmukestlesepuyments.Tle
uveiugenumbeiolpuymentsuiound
tlewoildis29.9.Tlenumbeiislowest
intleOECDeconomies(13.2)und
liglestinCentiulEuiopeundEustein
Euiope(4S.3).
One tax per base = fewer tax
payments
Economieswlicllevyonetuxpeibuse
luveuleweinumbeiolpuyments,wlile
tleeconomieswitltlemostpuyments
levynumeioustuxes.
Online ling has positive effect on
number of payments indicator
Economieswliclluvedeliveiedtle
elciency guins ol online ling und
puymentoltuxes,loigoveinment
undbusiness,ulsodowellontle
numbeiolpuymentsindicutoi.Intlese
ciicumstunces,tlenumbeioluctuul
puymentsisieducedtoonepeitux.
Consumption taxes are the most
time-consuming
Consumptiontuxes(muinlyVAT)uie
tlemosttime-consumingoltletuxes,
undtliscunbeleuvilyullectedbytux
uutloiitiesudministiutivepiuctices.Oui
ieseuiclslowstlutittukesmoietimeto
complyilindiiecttuxesuieudministeied
byudilleienttuxuutloiity,undulsoil
invoicesluvetobesubmittedwitltle
VATietuins.
Labour taxes most time-consuming
in the EU
IntleEuiopeunUnion,tlemost
time-consumingtuxesuielubouituxes
undcontiibutions,witlcompliunce
timeubovetlewoilduveiuge.Tlis
includestletimeneededtoudministei
employeetuxestliougltlepuyioll.
MunyEuiopeunUnioneconomiesluve
multiplelubouituxesundtliscun
incieusetletimetocomply.
Longest compliance time in
South America
Ittukestlelongesttimetocomply
onuveiugeintleSoutlAmeiicun
economies.Alltletuxesuiemoietime-
consuming,undtlisisoltenincieusedby
tleneedtokeepudditionulbookssolely
loituxpuiposes.
Good tax administration is important
for business.
Tleuppioucloltletuxuutloiities
unddeulingwitlutuxuuditoidisputes
uietleuspectsoltletuxsystem
tlutcontiibutoisuioundtlewoild
mostwunttoimpiove.Contiibutois
ineconomieswleietleieisun
independent und elcient uppeul piocess
lounddeulingwitluuditsunddisputes
eusieitluntloseeconomieswleietlis
isnottlecuse.
Lowest tax cost and compliance
burden in high-income economies
Higl-incomeeconomiesluvetle
lowestuveiugetuxcostundtlelowest
compliunce buiden, ieecting mutuie
tuxsystems,uliglteiudministiutive
toucl,undmoieuseolelectionic
inteilucebetweentuxpuyeisundtux
uutloiities.Low-incomeeconomies
luveligleituxesonuveiugeundmoie
buidensomecompliuncepioceduies.Itis
impoitunttolooktogoodpiucticesund
modelstolelpincieusetuxcompliunce
undcollectionindevelopingeconomies.
Using the Paying Taxes
data around the world
Chapter3:UsingtlePuyingTuxesdutuuioundtlewoild
Australla S2
Brazll S3
Canada S4
Chlna SS
Cted'Ivolre S6
CzechRepubllc S7
TheGCCcountrles S8
Ghana S9
Indla 60
RepubllcoIKorea 61
Malaysla 62
TheNetherlands 63
Nlgerla 64
Poland 6S
Romanla 66
5lngapore 67
5outhAIrlca 68
5wltzerland 69
UnltedKlngdom 70
Zambla 71
Botlgoveinmentundbusiness
undeistundtlepioblemswitl
Austiuliustuxutionsystemundtle
impoitunceolmujoituxieloim.InMuy
2008,tleledeiulgoveinmentinitiutedu
ieviewolAustiuliusFutuieTuxSystem
(AFTS).Tlepuiposeoltlisieviewwus
toconsideiulluspectsoltletuxsystem,
otleitlunGoodsundSeivicesTux.
Tleieviewteumwusgiven18montls
toiepoittogoveinmentwliclitdid
inDecembei2009.Tlegoveinment
ieleusedtleAFTSiepoitinMuy2010.
Tleieviewmude138iecommendutions
wliclweiedesignedtodeveloputux
systemwliclwouldbetteiposition
Austiuliutodeulwitltleclullenges
oltle21stcentuiy.Tleieviews
iecommendutionslocusedonclunges
tlutwouldmukeAustiuliustuxsystem
moiecompetitiveinteinutionully,ieduce
itscomplexity,undenlunceitsequity
undluiiness.Attleoutsetoltleieview,
12S tuxes weie identied in Austiuliu -
oveilullolwliclimpuctbusiness.Yet
90%olievenueisiuisedbyonlyten
ol tlese tuxes. Tlis leudline nding
wusconsistentwitlPwCAustiulius
studyoltleAustiuliuntuxsystem
usingtlePwCTotulTuxContiibution
(TTC)liumewoik.Releusedin2007,
tlis study wus tle ist to liglliglt tle
impuctoltletuxsystemonAustiulius
luigest businesses. Tle study identied
tlutSStuxesuieleviedonbusinessby
ledeiulundstutegoveinments.Itulso
liglliglted tle stiuctuiul inelciency ol
Austiuliustuxsystemundtleobstucle
tluttlispiesentstoeconomicgiowtl.
TlePuyingTuxesstudiesluveieinloiced
tleseconceinsubouttlecomplexity
olAustiuliustuxsystem,undtle
impoitunceoltuxieloim.Austiulius
iunkingintlePuyingTuxesstudieslus
giuduullyslippedoveiiecentyeuis,us
otleicountiiesluveieducedtuxiutes
undimpiovedoiuddiessedcomplexity
intleiiownsystems.Inotleiwoids,
Austiuliulusbeengoingbuckwuidsin
teimsolglobulcompetitiveness.
Tle138iecommendutionsliom
tleAFTSieviewincludedpioposuls
toiutionulisetle12Stuxestoloui
elcient bioud-bused tuxes (peisonul
income,businessincome,ientson
nutuiuliesouicesundlund,undpiivute
consumption).Otleituxesslouldexist
onlytoimpiovesociuloutcomesoi
muiket elciency. Ovei time, otlei tuxes
wouldbeubolisled.
TleAFTSieviewiecognisedtle
incieusinguncompetitivenessol
Austiuliuscoipoiuteincometuxiuteund
iecommendeditbeieducedliom30%
to2S%.
Itiscleuitluttlekindoltuxieloim
neededinAustiuliuwilltukemunyyeuis
touclieve.Asyet,veiylewoltle138
iecommendutionsluvebeenendoised
bytlegoveinment,witlmunyulieudy
iejected.Tleieuiepioposulstoieduce
tlecompunytuxiuteto29%liom201S,
wlicl is to be lunded by u signicunt
newtuxontleiesouicessectoi.So
lui,tleieisnocommitmenttoiemove
unyoltleexistingtuxesinAustiuliu.
Allsectoisoltlecommunityiecognise
tlutluiddecisionswillbenecessuiy
tobioudlyexecutetleAFTSieview
iecommendutions.
Reform to meet
the challenges of the
21st century
Australia
2011 2006
Number of hours 109 107
Number of payments 11 13
Tim Cox, PwC Australia
Inteiestingly,tleiewusulongund
leuteddebuteintleleudupto
tleAugustledeiulelectionovei
pioposulsloiunewiesouicetux.
Tleoiiginulpioposulwusliglly
ciiticisedbyindustiy,uswellusby
munycommentutois.Tlisdebuteulso
liglligltedtlediveigentviewsbetween
goveinmentundtleindustiywitl
ieguidstotlecuiientumountoltuxpuid
bytleminingindustiy.Tlisieinloiced
tleimpoitunceolluvingtiunspuient
undobjectivemeusuiestoevuluutetle
impuctoltletuxsystemonbusiness.
TleBiuziliuneconomyiscuiiently
lucingupeiiodolexpunsion,uttiucting
uluigevolumeolinwuidinvestment.
Tolullyembiucetlisoppoitunity,itis
essentiulloitlecountiytoolleiulegul,
iegulutoiyundtuxenviionmentwlicl
isstuble,cleuiundstieumlined,und
inwliclloieigninvestoiscunopeiute
witleuse.
Fiomutuxpeispective,tleieismucl
to be done - und tlis is illustiuted by
tle guies piesented in tle Puying
Tuxesstudy.TletuxbuidenloiBiuzil
isslowntobeligl,witlutuxsystem
composedolmunyconlusingluwsund
iulesissuedbytleledeiul,stuteund
municipultuxuutloiities.Tleseiesult
intuxpuyeisspendinguluigeumountol
time tiying to keep up-to-dute witl tle
systeminoideitobeubletopeiloimtle
culculutions,tlenpiepuieundsendtle
inloimutiontotletuxuutloiities,und
puytleiituxes.
TlePuyingTuxesstudyliglligltstlut
Biuzil lus u dilcult tux system wlen
compuiedtootleieconomiesuiound
tlewoild.Itlusslowntlissumepictuie
ineucloltlesixyeuistlutitlusbeen
cuiiiedout.Tlislusiesultediniegului
commentuiyintleBiuziliunmediu,
undiecognitionliomtleBiuziliun
tuxuutloiitiestluttleieisuneed
loiclunge.
ItislopedtluttlenewPublicSystemol
DigitulBookkeeping(SistemuPublicode
EsciituiuoDigituloiSPED)muyleud
toimpiovementsloiBiuzil.Oncelully
implementedundintegiutedbytletux
udministiutions,tleexpectutionistlut
leweicommunicutionstogoveinment
willbeiequiiedwliclmuyiesultin
uieductionincompliuncetime.Tle
systemwillbecontiolleduutomuticully,
eliminute signicunt umounts ol
pupeiwoik,undieducetletimeto
complywitllegislutionclunges,und
tocleckunduuditinloimution.Tle
system will cioss-cleck ull inloimution
undidentilymistukes,iutionulising
tlepiocess.
Tletuxuutloiitiesuiestiongly
committedtomukingtlenewsystem
mundutoiyloiullcompunies,und
mostluigecompuniesuieulieudy
puiticiputinginit.Munytuxobligutions
undpioceduiesuieulieudyelectionic
loituxpuyeis,wlileotleisuiestillintle
tiunsitionpiocess.
Howevei, tle benets ol SPED loi tle
tuxpuyeiluveyettobeseenustle
tiunsitiontotlisnewsystemislikelyto
lustloiucoupleolyeuis.Solui,SPED
lusiequiiedudditionulelloitundcost
liomcompunieswloluveneededto
invest signicuntly to piepuie tleii stull
loitleclunge,undtoimplementnew
systemstocomplywitlulltlepiocesses.
Recognising a need
for change
Brazil
2011 2006
Number of hours 2,600 2,600
Carlos Iacia, PwC Brazil
2010isunelectionyeuiinBiuzil.
Howevei,despitetuxieloimbeingon
tleiiugendu,politiciunsuieyettolocus
ontlisusukeypiioiity.Inuddition
totleiesultsliomtlePuyingTuxes
study, tleie uie muny otlei inuentiul
institutionstlutuiepointingtotleneed
loi ieloim und u simplied tux piocess,
witlupuiticuluilocusonuddiessing
complexVATissuesbetweentlestutes
olBiuzil.Tlesystemcuiientlyiequiies
exclungeolinloimutionunddivisionol
tuxincomeumongtle26stutesundtle
FedeiulDistiict.Tlislusloisometime
been tle souice ol signicunt conict
betweentlestutes,oltenieleiiedto
us tle scul wui, und lus lindeied
tleieloimunddevelopmentoltle
tuxsystem.
Despitetleseissues,witltle
goveinmentsintioductionolSPEDund
giowingiecognitionwitlinsocietymoie
geneiullytluttletuxsystemneedsto
clunge,ituppeuistluttleinitiulsteps
towuids tux ieloim luve beentuken.
Fedeiulundpiovinciulbusinesstuxesin
Cunuduluvebeensubstuntiullyieduced
iecentlytounlistoiicullowol29.2%.
Tlisisluigelyduetoenluncements
intleunnuulcupitulullowunce
costullowunce(CCA)deductionloi
investmentsineligiblemunuluctuiing
undpiocessingmuclineiyund
equipmentundincomputeis.Asuiesult,
CunuduistleonlyG20economyintle
toptenlistloitleeuseolpuyingtuxes.
Fuitleiclungesluvebeenlegisluted
undby2012,Cunuduwillluveoneoltle
loweststututoiycombinedledeiulund
piovinciulcoipoiuteincometuxiutesin
tleG7gioupolindustiiulisednutions
ut2S%.
Altlougltletimetocomplylus
incieusedto131louisliom119in2006,
tleieuieongoingelloitstoieduce
compliuncecostsundmuketletux
system moie elcient tliougl initiutives
suclusincieusedluimonisutionol
ledeiulundpiovinciulincomeundsules
tuxes.Foiexumple,in2009,tleledeiul
goveinmentbeguntoudministeitle
piovinceolOntuiioscoipoiuteincome
tuxsystem.Asuiesult,businessesuie
nowubletocombinetuxpuyments
und le u single coipoiute tux ietuin.
Inuddition,ellective1July2010,u
HuimonisedSulesTux,busedontle
sumeiulesustleledeiulGoodsund
SeivicesTux,ieplucedtlepiovinciul
sulestuxsysteminBiitislColumbiu
undinOntuiio.Giventleiiellective
dutes,tlecompliuncesuvingsol
tleseinitiutiveswillnotluvebeen
lullycuptuiedintlecuiientPuying
Tuxesstudy.
Additionulinitiutivesweieulso
undeitukenin2010.Stuitingliomtle
2010tuxutionyeui,ceituincompunies
witlunnuulgiossievenuesexceeding
S1 million uie iequiied to le tleii
coipoiuteincometuxietuinsonline.In
its2010budget,tleledeiulgoveinment
eliminutedtuxontledisposulolceituin
typesoltuxubleCunudiunpiopeity
by non-iesidents und tle ieluted
section116iepoiting.Tlismeusuie
slouldulsolelpCunudiunbusinesses
touttiuctloieignventuiecupitulund
investment.Howevei,tleledeiul
goveinmentpioposedunewiepoiting
iegimeloiuggiessivetuxuvoidunce
tiunsuctionsundincieusediepoiting
loi tiunsuctions witl non-uims lengtl
non-iesidents. Tlese meusuies will
incieusetleudministiutivebuidenloi
Cunudiuntuxpuyeis.
Tleledeiulgoveinmentulsounnounced
tlutitintendstolookutintioducingu
systemollosstiunsleisoiconsoliduted
iepoitingloicoipoiutegioups.
Amongotleitlings,tliswouldullow
Cunudiuncompuniestouvoidluvingto
undeitukecomplexieoigunisutionsund
tiunsuctionstotiunsleituxlossesumong
ielutedcompunies.Cuiiently,Cunuduis
tleonlycountiywitlintleG7witlno
loimoltuxconsolidutioniegime.
Reducing the tax
burden to stimulate
growth and restore
FRQGHQFH
Canada
2011 2006
Saul Plener, PwC Canada
Tleledeiulgoveinmentiemuinslocused
onimpiovingtlecompetitiveness,
elciency und luiiness ol tle
Cunudiuninteinutionultuxsystem
undlusimplementedsomeoltle
iecommendutionsmudebytle
AdvisoiyPunelonCunudusSystemol
InteinutionulTuxution.Itlusindicuted
tlutitwillcontinuetoieviewtle
otleiiecommendutionsmudebytle
AdvisoiyPunel.
Tleseinitiutivesuieuimedutstimuluting
economicgiowtl,undiestoiing
condence lollowing tle globul
economiciecession.TleCunudiun
goveinmentisuwuietlutitmuststuy
tlecouiseinieducingcoipoiutetux
iutesundeusingudministiutivebuiden
loiCunudiuntuxpuyeistoiemuin
inteinutionullycompetitive.
TleIvoiiunuutloiitiesundbusiness
woild ist took notice ol Cote dIvoiies
iunkingsintleuoingBusincssund
PuyingTuxcs2010publicutionsduiingu
businessloiumleldinNovembei2009.
Tleloiumwusoigunisedundeitle
uegisoltleMinistiyolEconomyund
FinunceundtleMinistiyolIndustiy,
witlsuppoitliomtlepiivutesectoi.
EmployeisundtleIvoiiunClumbei
olCommeiceulsotookpuit.Tlekey
objectiveoltleloiumwustolocustle
uttentionolgoveinmentundbusiness
ontleneedtoimpiovetlebusiness
enviionment,undtoinitiuteinnovutive
ieloim.TlePuyingTuxesiesultsloi
tle Cote dIvoiie uie ol signicunt
inteiest.But,ultlouglelloitsuiemude
eveiyyeuibytletuxudministiutionto
impiovecompetitivenessloibusiness,
mujoituxpioblemsstillpeisist.
TleTotulTuxRuteluslulleninCote
DIvoiie,muinlybecuuseoluieduction
intlecoipoiuteincometuxiuteund
tleiemovuloltlecontiibutionloi
nutionuliebuilding.ButtleIvoiiun
tuxudministiutionisincieusingly
conceinedbytleextentoltuxevusion
giventleconsideiublegiowtloltle
inloimulsectoi(i.e.undisclosedsmull
enteipiises).Tleieloie,loiseveiulyeuis,
itlusdevoteditseneigytobioudening
tletuxbuse,inoideitobiingusmunyol
tlepeopleopeiutingillegullyuspossible
intotleloimultuxnet.Tleintioduction
olustunduidinvoice,undnumeious
iequiiementsloibusinessestomuke
tuxdeductionsutsouiceonincome
puidtotliidpuities,uiekeymeusuies
implementedbygoveinmenttouclieve
tlisgoul.Butwliletlededuction
oltuxutsouicedoesnotcieute
udditionultuxexpenseloibusinesses
intleloimulsectoi,tleintioductionol
decluiutoiyobligutionsdoesincieuse
tleudministiutivebuidenloitlese
compuniesintlemunugementoltuxes.
Tlis is ieected in tle time to comply ol
270louis.Itiscleuitlutwlileieducing
tuxevusionistlepiimuiygouloltle
goveinment, tle simplicution ol tlese
meusuiestoeusetlebuidenonbusiness
iemuinsumujoiissuewlicllusstillto
beuddiessed.Tlenumbeiolpuyments
indicutoiloiCoteDIvoiieinPuying
Tuxcs2010wus66,puttingtlecountiy
umongtletencountiieswitltleliglest
numbeiolpuymentsintlestudy.Aligl
numbeioltuxesunduluckolelectionic
ling uie tle key ieusons loi tlis. Tle
numbeiolpuymentsluslullenbyonly
twopuymentsto64intle2011iepoit.
Tleie lus not been uny signicunt
ubolitionoltuxes.
Anotleimujoituxpioblemwoitl
mentioning,wliclgoesbeyondtle
scenuiiocuptuiedbytlePuyingTuxes
cuse study compuny, is tle non-
ieimbuisementolVATciedits.Itis
estimutedtlut,by31Decembei2010,
tleumountinunpuidcieditswillstund
ut ovei USS200 million - und tlis ut u
timewlen,intlecuiienteconomic
climute,businessesluveuconsideiuble
needloicusl.UndeitleIvoiiuntux
system,VATslouldnotbeunexpense
loibusinesses,undVATcieditsslould
beuutomuticullyielunded.Tleongoing
non-ieimbuisement ol VAT ciedits
cuiiently iepiesents u signicunt scul
expense.Tleemployeisledeiutionlus
ludsomesuccessinitselloitstoiesolve
tlisissue,iesultingintleintioduction
ol un initiutive in tle 2011 scul budget
toexemptsomeugiicultuiulexpoit
businessesliomVAT.Howevei,tlis
meusuiedoesnotdeulwitltleoveiull
pioblemoloutstundingVATciedits
wliclisstillunissueloitlebioudei
businesscommunity.
Simplilyingtletuxudministiutive
system, und ielieving tle scul piessuies
tlutlullonbusinessesintleloimul
economy,iemuinmujoiclullengesloi
tletuxuutloiities.Attlesumetime,
bioudeningtletuxbuseundieducing
tleextentoltleinloimuleconomyuie
stillmujoipiioiitiesloigoveinment.It
uppeuistluttlegoveinmentcuiiently
leelstluttlebestwuytouddiesstle
evusionissueistosolicittlelelpol
businessintleloimuleconomy.But
tlisintuinisincieusingtlebuiden
ontlesebusinesses.Tleubsenceol
impiovementintlePuyingTuxes
indicutoisloiCoteDIvoiieillustiutes
tlispointundliglligltstleneed
toclungetlismindset.Incieusing
uwuienessoltlePuyingTuxesiesults
umongtleIvoiiunuutloiitiesislelping
todiuwuttentiontotleneedloiuigent
ieloim.PwCCoteD'Ivoiiecontinuesto
mukeiepiesentutionsontuxissuesloi
tle unnuul scul budget in conjunction
witltleTuxCommissionoltle
EmployeisFedeiution.
Reducing the
informal economy
without increasing
the burden for the
businesses that do
pay tax
Cte dIvoire
2011 2006
Dominique Taty, PwC Cte DIvoire
Witlimpiovementsmudetotle
tuxcompliuncesystemundtle
implementutionoluseiiesoltux
ieloims,Clinulusmudeiemuikuble
piogiessinieducingtletuxcostund
tlecompliuncecostloituxpuyeisovei
tlepustlewyeuis.TlePuyingTuxes
iesultsillustiutetlispiogiess,slowing
utiendolpuyingtuxesbecomingeusiei
loitlecusestudycompunyinClinu.
Impiovementsluvebeenmudeinull
tlieeuieusmeusuiedintlestudy.
TlelullinClinusTotulTuxRuteuiose
muinlyliomtleCoipoiuteIncomeTux
(CIT) ieloim in 2008, wlicl unied two
sepuiuteenteipiiseincometuxiegimes
loidomesticenteipiisesundloieign
investmententeipiisesintousingle
iegime.Itulsoieducedtlestunduidtux
iute liom 33% to 2S%. Being u quulied
smull und tlin-piot enteipiise, tle CIT
iuteloiTuxpuyeiCowusieducedtoun
evenloweiiuteol20%.Tleiemovulolu
deduction limit loi suluiy expenses, pie-
opeiutingexpenses,etc.ulsoloweiedtle
tuxliubility.
Tle signicunt ieduction in louis to
complywusluigelyduetotleincieused
use ol tle electionic tux ling und
puymentsystemin2007.Oveitle
pustlewyeuis,Clinulusmudegieut
elloitstoexpundundlucilitutetleuse
ol electionic ling und puyment. In
tlepust,tuxpuyeisusuullyneededto
muke sepuiute visits to tle tux olce to
le tuxes und tlen to tle bunk to settle
tletuxpuyments.Alteitlis,tuxpuyeis
would luve to visit tle tux olce uguin
tosubmittletuxpuymentieceipt.Tle
iesult wus long queues ut tle tux olce
unduttlebunk,wlicluddeduluige
umountolwuitingtimetotlelouis
includedintletimetocomplyindicutoi.
Followingtleintioductionoltle
electionic tux ling und puyment system,
tletuxpuyeinowonlylustovisittle
tux olce once to submit tle nul tux
lingdocuments.
Anotleicontiibutingluctoitotle
ieductioninlouiswustleiecenttux
ieloimloiCITin2008undloiVAT
in 2009. Tle CIT ieloim unied und
stunduidisedtledeductioniules,wlicl
ieducedtletimepieviouslyneeded
loiconsultingwitltuxuutloiities.
Tle iemovul ol ceituin book-to-tux
udjustmentsulsoieducedtletime
neededtoculculutetuxesundpiepuie
ietuins. Undei tle new consumption-
oiientedVATsystem,tleiecoveiyol
inputVATincuiiedontlepuicluseol
xed ussets is no longei disullowed. Tlis
lusieducednotonlytletuxbuidenon
investinginequipment,butulsotletime
loi VAT ling, us it is no longei necessuiy
to soit out tle puicluse invoices loi xed
ussetsundieluteditemswlencluiming
inputVATciedit.
Major changes
make paying taxes
much easier
China
2011 2006
Rex Chan, PwC China
Tleieductionintlenumbeiol
puymentsinClinuisulsoduetotle
widei use ol tle electionic tux ling und
puymentsystem.
Inudditiontotleubove,Clinulusbeen
concentiutingondevelopingtleskills
ol tle locul-level tux udministiution
undtuxcollectionteums.Nowuduys,
moieundmoietuxpuyeisleeltlut
tleiiqueiiescunbeeusilydeultwitlby
tle tux olciuls und tlut tle quulity ol
tleiiinteiuctionswitltlemlusgieutly
impioved. Tle well-known tux lotline
12366lusbecomeunotleiimpoitunt
iesouicetluttuxpuyeiscunusewlen
tleyluvequestionsielutingtoduilytux
compliunceissuesinClinu.
TlePuyingTuxespublicutiononceuguin
cuptuiedtleinteiestoltleMinistiyol
FinunceintleCzeclRepublicduiing
2010.TleMinistiypuyscloseuttention
totleiepoitsinceitiuisesunumbei
olinteiestingissuesloidiscussionund
enublesucompuiisonoltleunnuul
iesultswitlotleicountiiesbotl
witlincentiulEuiopeundelsewleie.
SincetlePuyingTuxesstudybegun,
tleiesultsloitlecompliunce
indicutoisintleCzeclRepublicluve
impioved signicuntly. Tlis is due to
tle intioduction ol electionic ling,
simplied piocesses und simplied
tuxiutes.TlenewCzeclgoveinment,
loimedin2010,lusplunsloiluitlei
extensiveclungeswitlintletuxuienu,
includingtlepiepuiutionolunew
incometuxesuct.PwCCzeclRepublic
willpuiticiputeintliskeypiojectuspuit
oltlewoikinggioupputtogetleibytle
MinistiyolFinunce.
Tlecuiientwoidingoltleincometuxes
uctisuiound18yeuisoldund,duiing
tlistime,lundiedsolumendmentsluve
beenmude.Tlislusledtoucomplex
und dilcult system ol exemptions und
exceptionsloibotlindividuulsund
compunies.Adetuiledieviewoltle
cuiientincometuxesuctisunessentiul
ist step loi tle goveinment. But it is
likelytluttlelegislutionpiocesswill
needwidepoliticulconsensusundmuy
tleieloietukesometimetopiogiess.
Akeytlemeexploieduttletimeol
tlePuyingTuxcs2010luunclwustle
needloieusycommunicutionwitltux
olces und tiunspuient iules loi tux
inspectionstolelpbuildumoiecolesive
undellectivetuxsystem.TleMinistiy
olFinunceiecognisestleimpoitunce
oltleseissues,undliom1Junuuiy
2011,willbeginuseiiesolpiojectsto
simplilytuxudministiutionundlelp
tuxpuyeisbecomemoiecomloituble
witl tlesystem.
Anewtuxudministiutionuctwillbecome
ellectiveliom1Junuuiy2011,ieplucing
tlecuiienttuxcodewlicllusexisted
sincetleeuily1990s.Tleoiiginullocus
oltlecodewustocombuttuxuvoidunce,
butitbecumecomplexundcluiucteiised
byumbiguousteiminology.Asuiesult,
tlecostoltuxudministiutionintle
CzeclRepubliclusbecomeumong
tleliglestintleEU.Tlenewtux
udministiution uct slould signicuntly
incieusetleiigltsoltuxpuyeis,
unilyundsimplilytleiulesoltletux
pioceedings,undieducetlecostsol
tuxudministiutionundtuxinspections.
Amoieellectivetuxudministiution,
witludministiutoisspeciulisingin
dilleienttypesolcompunies,willbe
estublisledloiluigecompunieswitl
unnuultuinoveiexceedingCZK2billion
(USD100million),loibunks,undloi
insuiunce und ie-insuiunce compunies.
Anincieusednumbeiolbindingiulings
issued by tle tux olce in muny moie
uieusoltuxutionwillulsobelelplul
loituxpuyeis.
6LPSOLHGDQG
PRUHHIFLHQWWD[
administration
WREHQHWERWK
government
DQGbEXVLQHVV
Czech Republic
2011 2006
Lenka Mrazova, PwC Czech Republic
TleCzeclRepublicsPuyingTuxes
iesultsloitletimespenttoudministei
und puy tuxes luve been u signicunt
incentiveloitlegoveinmentto
ucceleiutetleimplementutionolu
singleievenueugency.Euclmontl,
Czecltuxpuyeisuiecuiientlyiequiied
topioduceloimsundpuytuxes,
sociulsecuiityundleultlinsuiunce
contiibutionstoseveiulindependent
olces. Tle intioduction ol tle single
ievenueugencywilllelpstieumline
tlesebuieuuciuticpioceduiesund
unilytleudministiutionoltuxes,
sociulsecuiityundleultlinsuiunce
contiibutions into one olce. A luitlei
ieloimieguidinglowtletuxbuseis
ussesseduswellusiestiuctuiingtle
plysicul locution ol tux olces slould
lollowsoon.Tliswillulsolelptoieduce
tlenumbeiollouisiequiiedtocomply
witltletuxsystem.
Wlile it muy be dilcult loi goveinments
todecieuseoievenkeeptuxiutes
constuntintimesoltigltstutebudgets,
ieducingtleudministiutivebuiden
cun ulwuys be u win-win meusuie,
deliveiing benets to botl goveinment
undbusiness.
TleMiddleEustiegionisconsideied
by muny to be u tux-liee enviionment.
Wliletlismuybetiuewitliespectto
tleubsenceolpeisonulincometux,in
mostGCCcountiies(Buliuin,Kingdom
olSuudiAiubiu,Kuwuit,Omun,Qutui,
UnitedAiubEmiiutes)itisceituinly
nottiuewlenconsideiingtlebioudei
subjectoldiiectundindiiecttuxution.
TlesubjectoltuxutionintleMiddle
Eustisincieusinglyolinteiesttotle
businesscommunity,especiullyus
goveinmentsuttempttodevelopund
muintuin economic und scul policies
tlutpiomoteloieigndiiectinvestment.
Tlisclullengeiscomplicutedbytleluct
tlutsomejuiisdictionsintleGCClevy
coipoiuteincometuxontlebusiness
uctivitiesolloieigneisopeiutingintle
GCC,butnotontloseoltleiinutionuls
oiotleiGCCnutionuls.Tlutisto
suy,tuxutioncunbedependentupon
citizenslipinsomejuiisdictionswitlin
tleMiddleEustiegion.
Anumbeiolinteinutionulgoveinment
ugenciesluveliglligltedtleneedloi
GCCgoveinmentstodiveisilytleii
ievenuesviutledevelopmentolu
compielensive scul policy to biing
uieliubleundsustuinublelevelol
goveinmentievenue(liomtuxution)
tliouglouteconomiccycles.Tle
ubsenceolsuclupolicyposesseiious
iiskstougoveinmentsubilitytomunuge
itsindividuuleconomywlenlieetiude
ugieementsmuyiesultintleeliminution
olexistingloimsolgoveinment
ievenue (specicully customs duties)
undwleiegoveinmentsielyontle
sule ol commodities, specicully oil und
gus(wlicluiesubjecttovolutilepiice
movements),ususupplementuiysouice
olievenue.
Witltlisinmind,goveinmentsintle
GCCuienowlookinguttleseclullenges
und uie discussing scul policy und
tle need to intioduce new tuxes -
specicully consumption tuxes. Tle
clullenge,lowevei,istlutgoveinments
wunt to muintuin u competitive scul
lundscupewlileuttlesumetime
geneiutingudditionultuxievenue.GCC
goveinmentsuienotsuielowtouddiess
tlisobjective,especiullywlentleyuie
keen to pieseive u tux-liee enviionment.
Recentiewiitesolcoipoiutetuxluwsin
Qutui,KuwuitundOmunuieexumplesol
clungeintleiegion.Tleseiewiitesuie
iesultinginunexpundedtuxbuseund
tle collection ol tuxution on cioss-boidei
tiunsuctionsviutleintioductionol
witlloldingtuxes.Tlesedevelopments
uielikelytocontinueundmuyinclude
tleintioductionolnewtuxes.
TlePuyingTuxesstudyisuuselul
benclmuikloitleiegionuguinstotlei
tuxsystemsundliglligltswlutclunges
uiebeingmudeinotleijuiisdictions
uioundtlewoild.Consideiingtle
geneiulubsenceolpeisonulund
coipoiuteincometuxutionloicitizensol
GCCcountiies(wletleipiolessionuls,
solepiopiietoislipsoicompunies),it
isnotsuipiisingtlutGCCteiiitoiies
cuiientlyleutuiepiominentlyinPuying
Tuxcs2011.
Tlutsuid,itisimpoitunttoiecognise
tluttlemetlodologyolPuyingTuxes
ussumesloculowneislip.Tlismeuns
tlut,inmunyGCCjuiisdictions,
coipoiuteincometuxisnotlevied
ontlecusestudycompuny.Indeed
tuxutioninmunyGCCjuiisdictionsis
limitedtosociulsecuiitytuxesundotlei
miscelluneousindiiecttuxes.Tlisisnot
tlecusemoiebioudlyintleMiddleEust
iegionwleiecoipoiuteincometuxis
levied on compuny piots.
Asindicutedubove,tlesubjectoltux
intleGCCisemeigingusunuieuol
locusloigoveinments.Solui,tle
GCCcountiiesluvemuintuinedtleii
loweiiunkingsinPuyingTuxcs2011.
Tleclullengeloweveiiswletlei
goveinmentsintleGCCcuniemuin
inteinutionullycompetitivegiven
tleieloimugendutlutuppeuisto
bedeveloping.
Reform in resource-
rich economies
The Gulf Cooperation Council
countries
2011 (av.) 2006 (av.)
Dean Rolfe, PwC Middle East
TleTotulTuxRute(TTR)puidby
TuxpuyeiCoinGlunulusseenu
ieductionliomuliglol40.1%in
2006toucuiient32.7%.Tlisis
muinlyduetoieductionsmudetotle
coipoiute tux iute - liom 32.S% in
2004,to28%in200S,undtlento2S%
loi scul yeui 2006. Sociul secuiity
contiibution is u signicunt cost in
computingtleTTRundeitlePuying
Tuxesmetlodology,usitloimspuit
oltlelegulobligution/mundutoiy
contiibutionloiTuxpuyeiCosopeiutions
inGlunu.Tliscostconstitutes40%ol
TuxpuyeiCosTTR.Tlisluitleistiesses
tlepointtlutotleipuymentsmudeto
tle goveinment uie us signicunt us tle
coipoiutetuxespuidbyTuxpuyeiCo.
On31Decembei2009,tlePuiliument
olGlunuguveussenttotleGlunu
RevenueAutloiity(GRA)Act.TleGRA
biingstogetleiulltleievenuecollecting
ugencies(VulueAddedTux(VAT),
InteinulRevenueSeivices(IRS)und
Customs,ExciseundPieventiveSeivices
(CEPS)oigunisutions)intoonebody.
Tlisisexpectedtoimpiovecustomei
seiviceloituxpuyeisundbiingGlunu
uptointeinutionulstunduidsinteimsol
utuxudministiutivestiuctuie.Howevei,
itisyettobeseeniltlisnewstiuctuie
willluveunellectontlenumbeiol
puymentsundontletimespentmuking
tuxpuymentstotletuxuutloiities.As
seenliomtleiecentPwCstudyontle
impuctolVATcompliunceonbusiness,
VAT compliunce tends to be moie time-
consumingincountiieswleieindiiect
tuxesuieudministeiedbyusepuiute
tuxuutloiitytotlutolincometux.
Cuiiently,diiectundindiiecttuxesuie
udministeiedbydilleienttuxuutloiities
inGlunuundtleseuieusuullyut
dilleientplysicullocutions.TuxPuyeiCo
lus to muke ve puyments to tle IRS
und12puymentstotleVATSeivicepei
unnum.Tliscontiibutestotleoveiull
timeol224louisneededtocomplywitl
TuxpuyeiCos tuxobligutions.
AspuitoltleGRAAct,ullievenue
institutionswillmoveontounelectionic
plutloim.Unitsloimediumundlow
tuxpuyeiswillulsobesetuptomeet
tlespeciulneedsoltlesedilleient
cutegoiiesoltuxpuyeis.Tliswilllelp
toimpioveseiviceundieducetle
numbeiollouistlutTuxpuyeiCospends
puyingtuxesundiesolvingissueswitl
tletuxuutloiities.Itisnotyetceituin
iltliselectionicplutloimwillinclude
electionic ling oi electionic puyment ol
tuxes.TuxpuyeiComukes33puyments
undspends224louisontuxcompliunce
euclyeuiinGlunu.Puitoltliscunbe
uttiibutedtotlecuiientwitllolding
tuxsystem.Aievisionoltlissystem,
includingloweiingtleiuteundullowing
selectedtuxpuyeistopuybyinstullment,
couldpotentiullyieducetlenumbeiol
louisundpuyments.
Animpoituntissuelucingbusinessesin
GlunuielutestoVATundwitllolding
tuxielunds.AsslowninPwCssuivey
ontuxudministiution,wliclwuscuiiied
outuspuitolPuyingTuxcs2010,it
tukesunuveiugeoltlieemontlsliom
lodginguielundiequesttoieceivingtle
cuslinGlunu.Altlougltliscompuies
luvouiublytootleicountiiesintle
AliicuUnion,wleieutliidolcountiies
intlesuiveyiepoitedtlutittukes
moietlunuyeuitoieceiveuielund
iequest,tlislullssloitwlencompuied
toeconomiesintleOECDoiEU.In
tleseeconomies,utleust60%olsuivey
iespondentssuidtleuveiugetimetuken
toieceiveuielundwustlieemontls
oiless.
Cuiiently,tleVATSeiviceiequiies
unuuditbeloieuielundolexcessVAT
puymentismudetoubusiness.Wlile
VATielundscunbeieceivedwitlin
tlieemontlsonuveiuge,witllolding
tuxielunds,ontleotleilund,cuntuke
oveisixmontls.Stieumliningtleielund
piocess could liee up cusl ow needed
tolundbusinessuctivity.
ImpiovingGlunusiutingintlePuying
Tuxesstundingsextendsbeyond
ieducingtuxiutes.Otleiuieuswlicl
cunbeimpiovedincludemukingiteusiei
topuybotldiiectundindiiecttuxesut
tle sume tux olce. Anotlei option muy
betomeigeiegistiutionloituxeswitlin
usingletuxbodyinsteudoltlecuiient
situutionwleiecompuniesluveto
iegisteisepuiutelywitldilleientbodies
loiVATundincometuxes.
More focus on tax
administration and
the compliance
EXUGHQIRUbEXVLQHVV
Ghana
2011 2006
Darcy White, PwC Ghana
TlePuyingTuxesstudycontinues
tobeuselulinpiovidingobjective
unulysis on tle umount u medium-size
compunymustpuyoiwitlloldintuxes
inugivenyeui,undontleweigltol
tlecompliuncebuiden.Tlesuivey
ulsocontinuestobeuuselulguideloi
udministiutiveieloim.
Tleieuiesomeinteiestingdevelopments
toiepoitwitlieguidstotletuxiegime
inIndiu.Ontlediiecttuxliont,in
2009,tlegoveinmentieleusedunew
diultdiiecttuxcode(DTC)loipublic
comment.Subsequently,inAugust
2010,uievisedDTCBillwustubledin
puiliument,uimedutsimplilyingtleold
IncomeTuxLuwwliclwusoiiginully
enuctedin1961.Inuddition,unewduul
GoodsundSeivicesTux(GST)stiuctuie
lusbeenpioposedwliclmuycomeinto
loicein2011.Tleieuieulsopioposuls
tointegiutetlecuiientcentiulundstute
indiiecttuxlevies(includingexciseduty
(CENVAT),seivicetux,VAT(loculsules
tux),enteituinmenttux,luxuiytux,etc.)
intouduulGSTcompiisingucentiul
GST(CGST)undustuteGST(SGST).
TlestunduidiuteolCGSTwillbe10%
ongoodsund8%onseivices.ASGST
willulsobelevieduttlesumeiutes.
Tlepioposediuteol10%loigoodsis
stutedtopiogiessivelydeclineto8%in
uplusedmunnei,sotluttlecombined
ellectoltletwoGSTswillieduceto
16%liomuninitiul20%.Itisexpected
tluttleimplementutionoltlisnew
GSTiegimewillieducetleTotulTux
RuteinIndiu,ustletuxesleviedundei
uGSTiegimewillbetuxescollected,
butnotnecessuiilyboine,bytlecuse
studycompuny.
Iniecentyeuis,tleielusbeenpiogiess
in tle use ol online ling und puyment
inIndiu.Tleonlinepuymentlucility
loiVATinMumbuiisnowopeiutionul
und tle ling piocess loi coipoiute
tuxietuinsinIndiulusbecome
pupeilesslollowingtleintioduction
olumundutoiyiequiiementloitlese
tuxietuinstobedigitullysigned.
Pieviously, tle tux ietuins weie led
electionicully,butdigituluutlenticution
oltleseietuinswusoptionul.We
ulsoundeistundtluttleIncomeTux
Depuitmentisundeitukingunextensive
exeicisetoenublemunyincometux
ielutedloimstobecompletedonline.
Asimiluipiojectlusulieudybeen
successlully implemented loi lings
iequiiedundeitleCompuniesAct.
Rahul Garg, PwC India

A proposed new
integrated Goods
and Services Tax
to reduce both
the cost and
FRPSOLDQFHbEXUGHQ
India
2011 2006
PuyingTuxeslusbeenugoodpoint
olieleienceloitleRepublicolKoieu
goveinmentinteimsolussessingtle
competitivenessundellectivenessol
tlelocultuxsystem.Itlusulsoullowed
tleKoieunsystemtobebenclmuiked
uguinstmeusuiesbeingtukenbyotlei
countiiestoimpiovetleiicompliunce
enviionmentloituxpuyeis.Tlecuiient
goveinmentisuimingtocieuteumoie
business-liiendly enviionment und is
keentoimpiovetleeuseolpuyingtuxes
iunkingloitleRepublicolKoieuby
udoptinguppiopiiuteieloims.
Tlemostnoticeubleclungeloitle
countiyinPuyingTuxcs2011isu
ieductionintleTotulTuxRute(TTR)
liom36.4%in2006to29.8%tlis
yeui.Tlisismuinlyduetotlegiuduul
ieductionintlecoipoiuteincometux
iutesliom14.3%in2006to12.1%
in2009(loiumountsuptoKRW100
million)undliom27.S%in2006to
24.2%in2009(loiumountstleieultei).
TleTTRisnowoneoltlelowestumong
tledevelopedundemeigingeconomies.
Tlegoveinmentintendstoieducetle
coipoiuteincometuxiuteluitleiwitl
tleleudlineiuteieducingliom24.2%
to22%liom2012.
Reducingcompliuncecostsisulsoon
tlegoveinmentsugendu.Tlenumbei
ollouisluslullenby40louissince
2006usonlinesystemsluvedeveloped.
Aspuitoltleinitiutivetoimpiovetle
lutuietuxcompliunceenviionment,tle
goveinmentimplementedunelectionic
VATinvoicingsystemin2010(wlicl
willbecomemundutoiyliom2011).
TleelectionicVATinvoicingsystemis
expectedtolelpieducetlecostsoltux
compliunce signicuntly, building on
tleintioductionoltleelectionictux
ling system in 200S. Tlis new system
willmeuntluttuxpuyeisuienolongei
iequiiedtoissueupupeiVATinvoiceund
muintuinuluidcopyoltleseinvoices,
ustliswillbedoneelectionicully.Itis
tleieloielopedtluttlecompliunce
timeloiVATtuxpuyeiswilllull.Andus
tleVATinvoiceisbusicevidencenot
onlyloitleVATietuin,butulsoloitle
coipoiuteincometux(CIT)ietuin,tlese
impiovementsslouldlelpieduceCIT
compliuncetimetoo.
InJuly2010,uconsolidutedVAT
puymentiegimewusextendedto
upplytoullVATtuxpuyeis.Tuxpuyeis
uienowubletomukeonepuyment
to tle tux olce loi tle VAT liubility
loiulltleiibusinesspluces.Tlenew
consolidutedVATpuymentiegime
isexpectedtoieducetlenumbeiol
tuxpuymentspeituxpuyei.Altlougl,
giventlecluiucteiisticsoltlePuying
Tuxescusestudycompuny,tlisclunge
isnotexpectedtoimpucttlePuying
Tuxesiesults.
Similuidevelopmentsuieulsoundeiwuy
loicoipoiuteincometux.Oneoltle
most signicunt developments in tle
countiyscoipoiuteincometuxsystem
duiing2010wustleintioductionol
tleconsolidutedtuxietuiniegime.A
coipoiutegioupisnowullowedtoelect
to le u consoliduted tux ietuin. Tle
RepublicolKoieugoveinmentexpects
tlisnewiegimetopiomoteneutiulity
ol tuxution und impiove tux elciency
loicoipoiutegioups.Butuguin,tliswill
notimpucttlePuyingTuxesiesultsus
tleieisnogioupolcompuniesintle
ussumptionsused.
Tlegoveinmentistocontinueitselloits
touclieveunellectivetuxiegime,und
tobenclmuikitselluguinstoveiseustux
compliuncesystemsinoideitoensuie
tluttleKoieuntuxsystemiemuins
competitive.Howevei,tlecuiient
economiciecessionundtleneedto
secuieuiobustgoveinmentbudgetis
ulsoslupinglutuiepolicyinitiutives.
Itislikelytluttlegoveinmentwill
ieducetuxiutesluitleiundintioduce
meusuiestobioudentletuxbusewitl
tlelutuieimpositionolstumpdutyon
tleExclungeTiudedFundsundlisted
deiivutives.Itmuyulsoubolislsome
existingstumpdutyexemptionsloi
publiclyplucedlundsundtleexemption
liomcupitulguinsloiollsloielisted
sluiesinvestedbyudomesticlund.
Using Paying Taxes
to benchmark the
WD[bV\VWHP
Republic of Korea
2011 2006
Soo-Hwan Park, PwC Republic of Korea
PEMUDAH(MuluysiusSpeciulTusk
FoicetoFucilituteBusiness,wlicl
iepoitstotlePiimeMinistei)is
continuingitselloitstoimpiovetle
deliveiyolpublicseivices,undto
enluncetlebusinessenviionment
includingtuxcompetitivenessund
elciency. To meusuie its uclievements,
PEMUDAHtiuckstlieekeyinteinutionul
iepoitsincludingtleWoildBunkund
IFCsuoingBusincssiepoitunditseuse
olpuyingtuxesindicutois.
On27Muy2010,PEMUDAHsFocus
GiouponPuyingTuxes(FGPT)ieleused
unuiticleentitled,CunMuluysiu
mukeiteusieitopuytuxes?Tliswus
publisledinoneolMuluysiusleuding
newspupeis.Intleuiticle,Cluiimun
oltlelocusgioup,DutukCluuTiu
Guun,givesuninsigltintotleinitiutives
tukenbytlegioupincontinuingtux
ieloims loi gieutei elciency und euse
ol doing business. Accoiding to ndings
bytleWoildBunk,louikeysuccesslul
tuxieloimsluvebeenimplemented
uioundtlewoildsince200S.Tleseuie
liglligltedintleuiticleundinclude
intioducing online ling; combining
tuxes; simplilying tux udministiution;
undieducingtuxiutesundbioudening
tlebuse.
Witltleseieloimsinmind,undusing
tlesumemetlodologyustleWoild
Bunk,PEMUDAHsFGPTlusexumined
tletuxesundmundutoiycontiibutions
tlut u medium-sized compuny in
Muluysiumustpuyoiwitlloldinu
givenyeui,uswellusmeusuiingtle
udministiutivebuideninpuyingtuxes.
Inellect,MuluysiusPuyingTuxes
iunkingisbeingusedusubusisloitle
FGPTsinitiutivestomukepuyingtuxes
eusieiuciossulltlemuintuxes.
Piobubly tle most signicunt meusuie
implementedin2010lusbeentle
intioductionolMyCOID.Tlisullows
compuniestointeiuctwitldilleient
goveinmentugencies(including,
tleInlundRevenueBouid,ugencies
udministeiingsociulcontiibutions,
und tle SME Coip -loimeily known
ustleSmullundMediumIndustiies
DevelopmentCoipoiution)witljustone
stunduid identicution numbei .
PEMUDAHulsopiovidesuglimpseol
pioposedmeusuiestobeimplemented
intlenextstugeoltleFGPTsplunloi
continuingtuxieloim.Foibusiness,
tleseincludecompensutionloilute
tuxielunds(potentiullyin201S),u
ieduction in tle six-yeui timeliume
witlinwliclutuxuuditcunbecuiiied
outinoideitoieducetleunceituinty
loibusinesses,consolidutionolceituin
tuxpuymentsintoonepuyment,und
tle stunduidisution ol tle denition ol
wugesloitlepuiposeolcomputingtle
vuiioussociulcontiibutions.
Aiming to be in the
top ten for the ease
of paying taxes
Malaysia
2011 2006
Chuan Keat Khoo, PwC Malaysia
Tlieeyeuisulteiitsloimution,
PEMUDAHcontinuestopuisueits
missionoldiivingtlenutionwitl
moiesubstuntiveimpiovementstlut
cieutegieuteiimpucttotlenutions
competitivenessundinitiutivestlut
mukeudilleiencetotlelileoltle
businesscommunityundtlecitizeniy.
Itsmeusuieolsuccessinuclievingtlis
visionistoimpioveMuluysiusiunking
intleWoildBunk'sEuseoluoing
Busincssundieucltlegoulolbeing
iunkedumongtletop10nutions,(liom
PEMUDAHs2009AnnuulRepoit).
TlisyeuisPuyingTuxesiepoituguin
slows u signicunt lull in tle numbei
ollouistlutuieneededbyouicuse
studytocomplywitlitstuxulluiis
intleNetleilunds.Tlisisconsistent
witltlelongeidownwuidtiendin
tledutusince2006.Tlediiveto
ieducecompliuncetimewusboosted
bytlesuccesslulluunclolPuying
Tuxcs2009intleNetleilundsundtle
uccompunyingpoliticuldebuteoveitle
iesults.Tlisieductionisukeyieusonloi
tleimpiovementtotleoveiullDutcl
iunkingliom33to27sincelustyeui.
TleDutclgoveinmentlusconsistently
ucknowledgedtleneedtoieduce
tleudministiutivebuidenoltletux
systemundlusplucedtlisobjective
uttleloieliontolitstuxpolicy.In
timesoleconomicciisis,uieductionin
udministiutivebuidenolleiswelcome
ielielloibusinesses,byieducing
compliuncecostsundimpioving
businesses cusl ow position.
Tlesubstuntiullullintlenumbeiol
louistocomply,wliclisslownintlis
yeuisiesultsloitleNetleilunds,cun
beexpluinedbytlevuiiousmeusuies
tluttleDutclgoveinmentintioduced
mostiecently,undwliclluveludun
impuctduiingtlepeiiodoltlisyeuis
cusestudy.
Animpoitunttempoiuiymeusuieloi
VATwusintioduced,givingcompunies
un option to le quuiteily insteud ol
montlly.Tlismeusuiecunleudto
udeluyinVATpuyments,impioving
compunies cusl ow, und muy ulso
iesultinusubstuntiuldecieuseintle
timetukentocomply.Recently,tle
MinisteiolFinunceunnouncedtluttlis
tempoiuiymeusuie,initiullyintioduced
loi2009und2010,willbeextended
duetoitssuccess.Ovei100,000
entiepieneuisluvemudeuseoltlis
meusuiesolui.
Witlieguidstocoipoiuteincometux,
tle pioceduie loi ling ietuins lus
ulso been mude eusiei witl simplied
iulesloipiepuiingunnuuluccounts.
Asol2009,tlesenewiulesullow
tle guies und buses used loi tle
commeiciuluccountstoulsobeused
loitlecoipoiuteincometuxietuinloi
smull und (to u ceituin extent) medium-
sizedenteipiises.
Ongoingpoliticuldebutelusulso
piomptedtleintioductionolseveiul
otleilutuiemeusuieswlicllocuson
ieducingtletimetocomply.Itisloped
tluttlesemeusuieswillluveupositive
impuctonlutuiePuyingTuxesiesults.
Tleyincludeuieducedudministiutive
buidenloiemployeiswitlieguidsto
newly-liied employees, tle intioduction
ol u common denition ol wuges loi
tlewugewitlloldingtuxundtle
vuiioussociulcontiibutions,undunew
woik-ieluted cost scleme loi wuge tux
puiposes.Altlouglnotupplicubleto
oui cuse study compuny, u signicunt
impiovementtotlepuiticipution
exemptioniegime,ellectiveusol
Junuuiy2010,slouldulsoluveu
positiveellectontletuxsystemwitl
ieguidstocoipoiuteincometux.
Followingtleiecentelections,Dutcl
politiciunsuiecuiientlypieoccupied
witltleloimutionolunewcubinet
undsoluitleisubstuntiulclunges
uienotexpectedwitlintlenextlew
montls.Howevei,tlecommitments
ulieudymudeinielutiontoieducing
tleudministiutivebuidenuiegiuduully
being lullled, und slould tuke
luitleiellectintleneuilutuie.Tle
indicutoisslowtluttleieisstillioom
loiimpiovementintleNetleilunds.
Wetleieloielopetluttlisimpoitunt
subjectiemuinsukeypiioiityloitle
newly loimed goveinment - ieguidless ol
itspoliticulpeisuusion.
In times of
economic crisis,
reducing the tax
compliance burden
is at the forefront of
WD[bSROLF\
The Netherlands
2011 2006
Roland Brandsma, PwC Netherlands
Nigeiiuiscuiientlypuisuingvuiious
tuxieloimswlicluiegeuied
towuids uclieving u business-liiendly
enviionment und simplied tux
udministiution.Tleieloimsincludeu
pioposedieductionincoipoiuteund
peisonulincometuxiutes,unincieuse
intleVATiute,undtledevelopment
ol u iisk-bused uppioucl to enloicing
tuxcompliunce.
Tlecoipoiuteincometuxiuteisto
ieduceliom30%to20%wliletle
topiuteolpeisonulincometuxisto
ieducemuiginullyliom2S%to24%.
Tlismuiginulieductionintlepeisonul
incometuxiutewillbeuccompuniedby
enlunced tux-liee ullowunces, widei
tuxbundsundieducedgiuduutediutes
loi low-income euineis. Tle pioposul
toincieuseVATcouldseetleiutegoup
to1S%liomtlecuiientS%intleneui
lutuie.Tliswillbeimplementedinu
steppedmunneioveiucoupleolyeuis.
Tlesliltinlocusliomdiiecttoindiiect
tuxisexpectedtowidentletuxbuse,
encouiugevoluntuiycompliunceund
ieducetlecostoltuxcollection.
Tlepioposultounilytuxiegistiution
loiullledeiultuxeslusulieudybeen
implementedinNigeiiu.Tuxpuyeis
nowonlyneedusingleiegistiutionloi
coipoiuteincometux,VAT,cupitulguins
tuxundotleiledeiultuxes.Following
tlis,upioposultodevelopuunique
tux identicution numbei (UTIN) loi
ulltuxpuyeisuciosstletlieetieisol
goveinmentledeiul,stuteundlocul
lusbeeninitiutedbytleJointTux
Bouid:tlebodyolNigeiiusledeiul
undstutetuxuutloiities.Tlepioposul
wusiecentlyuppiovedbytleledeiul
goveinment,butimplementution
couldtukeuptotwoyeuis.Wlenlully
implemented,tleUTINwillbeusedto
cieuteuNutionulTuxpuyeiDutubusetlut
willlucilitutetlemovementtowuidsu
teclnology-enubled tux system loi tle
countiy.TliswillmoveNigeiiustux
udministiutionundpiucticeonestep
closeitoglobulbestpiuctice.Inuddition,
tlepiojectwillpiovidebetteiuccess
toinloimution(especiullybetween
tuxugencies),ieducetlemultiplicity
oltuxes,undellectivelyincieusetle
ievenuetovuiioustieisolgoveinment.
Altlougltlepiocessisstillutuneuily
stuge,itisexpectedtluttleinitiutive
willincludeustiutegytoluimoniseoi
migiute tle existing tux identicution
numbeisintotleUTINundmuke
compliunce eusiei loituxpuyeis.
Someoltleongoingieloimsuiebused
ontlenewNutionulTuxPolicy(NTP)
wlicl lus been undeigoing ne-tuning
loi ovei two yeuis. Tle nul veision
oltleNTPwusuppiovedinJunuuiy
2010toseiveusuieleiencepointloi
lutuietuxlegislutionundtleevolution
oltleNigeiiuntuxenviionmentin
geneiul.TleNTP,lowevei,iequiiestle
necessuiylegulliumewoiktolucilitute
itsimplementution.
Nigeiiu,witl3Stuxpuymentsundu
32.2%TotulTuxRute,iunkswellonbotl
tleseindicutoisintleAliicunUnion.
Tleoneuieu,wliclnegutivelyimpucts
tlecountiysoveiulleuseolpuyingtuxes
iunkingundiequiieslocuseduttention,
continuestobetlevustumountoltime
(louispeiyeui)iequiiedtocomply
witltuxobligutions.Wliletleielus
beensomeieductionontlisindicutoi
since tle Puying Tuxes study wus ist
undeituken,Nigeiiustilliunks180outol
183 countiies in tle woild - und is lust in
tleAliicunUnion.
Anotleiuieuiequiiinguigentuttention
istlelengtloltimeittukestosettletux
disputes.Tlepiocessiscuiientlyveiy
slowundinellectiveundmunystutesdo
notluveubodyinplucetoudjudicute
intuxdisputes,despitepiovisionsin
tleluw.Attleledeiullevel,tleFIRS
EstublislmentAct,enuctedin2007,
estublisledtuxtiibunulsintlesix
geo-politicul zones. But, to dute, tle
tiibunulsluveonlybeenconstituted
unduieyettobecomelullyopeiutionul.
Asuiesult,munytuxcuses,wliclluve
beenpendingloiwelloveitwoyeuis,
iemuinuniesolved.
One step closer to
global best practice
Nigeria
2011 2006
Number of hours 938 1,120
Taiwo Oyedele, PwC Nigeria
Iniecentyeuis,Polundlusmude
signicunt piogiess to euse tle puying
tuxes piocess und tlis is ieected in tle
PuyingTuxesiesults.
WliletleTotulTuxRuteincieusedin
Polundultei2006,itlusieduceduguin
inmoieiecentyeuis.Tleieluvebeen
seveiultuxiuteieductions.Tleielevunt
legislutivemeusuiesweiepussedin2006
und2007,ultlouglsomeonlycumeinto
loicein2009.Tlemostimpoituntol
tleseincludedsubstuntiuldecieusesin
tlesociulsecuiityundpeisonulincome
tux(PIT)iutes.Tlesociulsecuiity
iute loi employees diopped by ve
peicentugepointsund,loiemployeis,
bytwopeicentugepoints.
Tleie lus been signicunt piogiess
onpioceduiulissues,undtletimeto
complyloiouicusestudycompunylus
lullen,uslustlenumbeiolpuyments.
Tlislusbeenuclievedpuitlytliougl
meusuiessuclusextendingiepoiting
peiiods.VATclungestlutcumeinto
loiceinDecembei2008luvebeen
puiticuluilyimpoitunt.Tuxpuyeisuie
now ullowed to le quuiteily insteud
olmontlly.
Alongsidetlesemeusuies,Polisl
luw-mukeis luve embuiked on
tletuskolencouiugingtleuseol
e-ling und intioducing u modein tux
e-udministiution. Tle initiul stuge wus
completedon1Junuuiy2008,wlen
ullbusinessesweiegiventleoption
to le ulmost ull tux ietuins online.
Tle intioduction ol tlis e-ling system
lusnotyetbeenlullysuccesslulus
businessesluveludtomeetunumbei
olloimuliequiiementsinoideito
puiticipute.Tlismuyluvediscouiuged
sometuxpuyeis,undtleielusbeen
someieluctuncetoubundontlepupei
ling metlod.
Tlis ieluctunce to embiuce e-ling is
ulsoevidentumongpeisonulincome
tuxpuyeis wlo luve tle option to le
ietuinselectionicully.In2009,only
uiound320,000individuuls(uiound
2% ol ull PIT tuxpuyeis) led tleii
ietuinsonline.Aguin,pioceduiulissues
uietlouglttoluvecontiibutedtotlis.
,PSURYLQJHOLQJ
and a modern tax
e-administration
Poland
2011 2006
Katarzyna Czarnecka-ochowska,
PwC Poland
Tleupsunddownsoltleinitiutives
desciibeduboveluvebeenclosely
monitoiedbygoveinment.Witl
tlisinmind,tleMinistiyolFinunce
commissioneduPwCsuiveytoseek
inputundsuggestionsonlowto
impiove tle e-ling system loi PIT.
Tlegoveinmentlusulsoembuikedon
unevenmoieumbitioustusktosetup
u lully modeinised e-udministiution.
PwCisulsoussistingwitltlispioject.
ITteclnologieswillbeusedtoiegistei,
gutleiundpiocesstuxinloimutionund
tlisslouldieduceinteiuctionsbetween
tuxpuyeisundtletuxuutloiitiestou
minimum.Fuitleimoie,uwideiungeol
PITtuxpuyeiswillbegiventleoptionto
luve tleii tux ietuins pie-completed by
tletuxuutloiities.Itisexpectedtluttle
e-udministiution ieloim will be complete
bytleendol2012.
PuyingTuxcs2011iunksRomuniu1S1
outoltle183economiesincludedintle
study. Tlis iunking is leuvily inuenced
bytleliglnumbeioltuxpuymentsin
Romuniu:113uieiequiiedduiingtle
couiseoluyeui,mostolwliclieluteto
luboui tuxes. Tleie is no electionic ling
cuiientlyuvuiluble.Romuniuscontinued
lowiunkinguiisesnotonlybecuuse
oltleRomuniuntuxsystemitsell,but
ulsobecuuseoltletuxieloimsbeing
implementedinotleicountiies.
TlePuyingTuxcs2010iepoitwuswidely
publicisedinRomuniu.Ituttiucted
signicunt mediu uttention, und
stimulutedgooddebute.Howevei,so
lui,lewuctionsluvebeentukenbytle
Romuniungoveinmenttosimplilytle
tux system und euse tle tuxpuyeis scul
buiden.Inluct,tletiendlusbeenloi
tlecompliunceindicutoistoincieuse.
tleTotulTuxRute(TTR)luslullenin
Romuniu,muinlyusuiesultollulling
lubouituxiutesloisociulsecuiity,
leultlinsuiunce,undunemployment
contiibutions.Intlemostiecentyeuis,
tleRomuniungoveinmentlustuken
seveiulmeusuiestolelpsuppoittle
businessenviionmentduiingtle
economicdowntuin.Tuxpuyeisluve
beengiuntedsociulsecuiityexemption
duiingpeiiodsoltempoiuiyinuctivity,
undulsotlepotentiultodeleitux
liubilitiesundeiceituinconditions.
Tlesemeusuies,lowevei,donotullect
tleTTRloitlePuyingTuxescuse
studycompunyustleconditionsdo
notupplytotleussumptionsmudeloi
tlecompuny.
Tlenumbeiollouisneededtocomply
witltlemujoituxeslusincieused
witlmucloltlisluppeningintle
lustyeui(liom202louisinlustyeuis
studyto222louiscuiiently).Tlis
ismuinlyduetotleintioductionol
moiebuidensomeiequiiementsin
ielutiontolubouiugieements,und
ulsoudditionulcoipoiuteincometux
compliuncepioceduies(loiexumple,
tleiequiiementloimoiedetuiled
unulysisoluccountinginloimutionin
ielutiontosensitiveitems).Piogiess
lus,lowevei,beenmudeuttlesume
time.Tlepiocessloiissuingelectionic
invoices,intioducedinOctobei2009,
lus been simplied in oidei to impiove
tlecompliuncepiocess.
Duiing2010,tlegoveinmentlus
intioduced seveiul luitlei scul
meusuiesuimedutlelpingtouclieve
budget decit tuigets. Tlese meusuies
uieexpectedtoluveunimpuctontle
PuyingTuxesindicutoisintlelutuie.
TleyincludeunincieuseintleVAT
iuteliom19%to24%,ulongwitl
tleintioductionoludditionulVAT
compliunce meusuies; un incieuse in
otleilocultuxes(e.g.velicletux,tuxes
on tle issue ol ceiticutes, notices und
uutloiisutions loi udveitising); und
tle intioduction ol u new lute-puyment
penultysystem.
Against the trend
a rising tax burden
on business
Romania
2011 2006
Peter de Ruiter, PwC Romania
Tlegoveinmentlusulsopostponedtle
intioduction ol u simplied udvunce
coipoiuteincometuxpuyments
system,initiullyplunnedloi2010,until
2012.Wlentlesystemiseventuully
intioduced,itisexpectedtlutitwill
muketlecompliuncepioceduieeusiei
loitletuxpuyeiundieducetlenumbei
ollouisiequiied.
Itiscleuitlutudditionulmeusuiesto
stieumlinetletuxudministiutionuie
necessuiytolelpRomuniubecomeun
impoituntlocutionontleinvestois
mup.TlePuyingTuxesindicutois
uiepiovingtobeuuselulcutulyst
loi discussions witl olciuls in tle
Romuniungoveinmentundpiovideun
impetusloiinitiutingcompielensive
tuxieloims.Tleluuncleventloi
PuyingTuxesinBucluiesttlisyeuiwill
iepiesent unotlei signicunt milestone
in tlispiocess.
Tuxpolicypluysunintegiuliolein
Singupoiesstiutegyloibeingumujoi
globulbusinesslub.Tleellectiveness
und elciency ol Singupoies tux system
isevidentliomitsconsistenttopten
iunkingsintlePuyingTuxesstudysince
it wus luuncled ve yeuis ugo.
Singupoieisiunkedlouitlloitle
oveiulleuseolpuyingtuxesintlelutest
study,witludecieuseinTotulTuxRute
(TTR)liom27.7%to2S.4%oveitlelust
yeui.TlisclungeinTTRismuinlydue
totuxieloimsintioducedpiogiessively
unduimedutenluncingSingupoies
long-teim ubility to uttiuct investment
und to weutlei tle globul nunciul ciisis.
Amongotleiieloims,tlepievuiling
coipoiutetuxiutewusieducedliom
18%to17%,undu40%piopeitytux
iebutewusolleiedtoeusebusinesscosts
intle2009budget.
Inteiestingly,neuily60%oltleTTR
consistsoltleemployeicomponentol
umundutoiyCentiulPiovidentFund
(CPF)contiibution.Tlecuslbuiden
incuiiedbyemployeisliomCPF
contiibutionswusieducedliom
1Junuuiy2009to30June2010
tliougltleintioductionoluJobsCiedit
Scleme.Undeitlisinnovutiveinitiutive,
unemployeiieceivedu12%cuslgiunt
in2009(ieducedto6%und3%in
2010) on tle ist SS2,S00 ol quulilying
montllywuges.OveiSS4.3billionin
jobscieditswuspuidoutintotul.Tle
impuctisnonetlelessnotevidentin
SingupoiesTTRiesultsustleciedits
uienotdeductibleloituxpuiposes,noi
tuxubleintlelundsolcompuniestlut
ieceivedtlem.
Singupoies ve tux puyments uie un
indicution ol tle elciency ol tle tux
systemwlencompuiedtotleglobul
uveiugeol30puyments.Tlesetuxes,
euclspieudoveidilleienttuxbuses,
ensuietlestubilityolSingupoies
tuxievenuesundtleubilitytomuke
sustuinublepublicinvestmentloi
tlelutuie.
InlinewitltlelowTTRiuteund
ielutivelylewtuxpuyments,Singupoies
low time-to-comply ol 84 louis slows u
business-liiendly uppioucl towuids tux
collection tliougl e-ling, simplied
loims und elcient udministiution.
Discussionsloiieloimuie,lowevei,
continuing.Followingtleluuncloleucl
PuyingTuxesstudyoveitlepustlew
yeuis,tleSingupoietuxuutloiitiesluve
engugedwitlPwCSingupoietodiscuss
wuysinwlicltletuxsystemcouldbe
mude moie elcient und ellective in
compuiisontopeeieconomies.
Consistently in
the top ten but
striving for further
HIFLHQFLHV
Singapore
2011 2006
David Sandison, PwC Singapore
DespiteSingupoiesexcellentiesultsin
tlePuyingTuxesstudy,tlemetlodology
usedloitleculculutionsdoesnot
cuptuietlelullextentoltleSingupoie
tuxsystemloicompunies.Tlisisdue
to tle domestic und iestiicted-uctivity
piole ol tle cuse study compuny used
intleiepoit.Tleieuieunumbeiol
tuxincentives,iebutes,tuxdeductions
undtuxtieutiesuvuilubleinSingupoie
wlicldonotupplytoTuxpuyeiCo.
Enlunceddeductions,tuxlossieloims
undgiuntsuieulsobeingintioduced
toencouiugeinvestments,innovution,
undentiepieneuislip.ATotulTux
Contiibutionstudyusingdutuliomieul
compuniesinSingupoiecouldpiovide
luitleiinsigltsontleellectivenessund
elciency ol tle system.
tleielusbeenudownwuidtiendin
SoutlAliicusiesultsbiougltuboutby
lullingcoipoiuteincometuxiutes,und
u bioud-bused diive towuids electionic
ling und simplilying tux ietuins. In
tlewukeoltleiecession,itisexpected
tluttleSoutlAliicungoveinment
willmuintuinitslocusontuxpolicy
undieloim.
Tleglobuleconomyexpeiiencedits
deepestiecessioninsevendecudes,
piecipituting Soutl Aliicus ist
iecessionin17yeuis.InSoutlAliicu,
tledeptloltledomesticdowntuinis
best meusuied not in GDP guies, but in
lumunteims.Moietlun900,000people
luvelosttleiijobssincetleciisisbegun.
Tlis lus lud u signicunt ellect on tleii
livesundontleliveliloodsolmillionsol
SoutlAliicuns.
Tuxpolicylusbeenusedusunimpoitunt
instiumenttouidiecoveiyliomtle
economicdowntuin.SoutlAliiculus
locusedinpuiticuluionmuintuining
stubility.TleNutionulTieusuiyupplied
long-teim piinciples in tle budget
piocess.Tleseincludedpiotectingtle
pooi; sustuining employment giowtl
und expunding tiuining oppoitunities;
buildingeconomiccupucityund
piomoting investment; und uddiessing
tlebuiiieistocompetivenesstlutlimit
unequitublesluiingoloppoitunities.
Indiivingtlisugendu,itlusulsobeen
necessuiytomuintuinusustuinuble
debtlevelsotlutuctionstoduydonot
constiuindevelopmenttomoiiow.Tlis
lustleieloiebeenuiutleiconseivutive
uppiouclwitlexpectutionsloioutput
giowtltoimpiove,suppoitedbypublic
inliustiuctuiespending,loweiinteiest
iutes,tleellectol2010FIFAWoild
Cupundupossibleiecoveiyintle
woildeconomy.
New tuxes identied und implemented
includeunenviionmentullevyon
electiic lument lumps (non-eneigy
suving).Anenviionmentullevyonmotoi
veliclecuibonemissionlevels(tle
moie luel-elcient tle cui, tle less tux is
cluiged)willulsobeimplementedintle
neuilutuie.Tlepiomotionolugieenei
economy occupies u im position ligl
upontlegoveinmentsugendu.Tlis
includespiocessestoencouiugeeneigy
elciency und ieduce luimlul emissions,
someolwliclluvetuximplicutions.
Altlougltuximplicutionsmuylimit
impoitunteconomicgiowtl,tlis
uppiouclulsopiotectsSoutlAliicus
lutuie.Intlisieguid,tleliglcostoltux
compliuncewilliemuinunissue.
TleiesultsoltlePuyingTuxesstudies
undtleempiiiculwoikconductedby
PwCSoutlAliicuinitstliidunnuul
TotulTuxContiibution(TTC)suivey
loiluigeSoutlAliicuncompunies
luvebeenwidelypublicisedinSoutl
Aliicu.TleTTCsuiveyslowstlut
despitetleiecession,tleluigest
compuniesinSoutlAliicucontinue
to contiibute u signicunt piopoition
oltlecountiysoveiulltuxieceipts.
Tlese iesults conim tle impoitunce
olluigeSoutlAliicuncompuniesto
tleloculeconomy.PuyingTuxeslus
piovedtobeunobjectiveinvestment
tooltlutpiovidesinvestoiswitluccess
toinloimutiononpeiloimunceintux
policyundudministiutionmutteis.
Itulsopiovidespolicymukeiswitl
objectiveinloimutiontlutcunbeused
topluntletuxlundscupeoltlelutuie.
Attlesumetime,otleistudiesbused
ontleTTCFiumewoik,inpuiticului,
tleglobulminingstudy,uieimpoitunt
inidentilyingkeyinvestmentsectois
undoppoitunitieswitlintleSoutl
Aliicuneconomy.
Aswitltleboompeiiodpiioito2008,
tleglobuliecessionwilliesultin
sweepingclungestotlewoildeconomic
lundscupe.Mujoiindustiies,liom
uutomobilestotelecommunicutionsund
eneigy,uieundeigoingiestiuctuiing
undiupidevolution.Tleieisnodoubt
tluttuxievenuesinSoutlAliicuwill
iemuinundeiextiemepiessuieund
cuiientindicutionsuietluttlelocusol
tuxpolicywilliemuinontlestubilityol
tlenutionuleconomy.
Tax policy in the
wake of recession
South Africa
2011 2006
Paul de Chalain, PwC South Africa
Tle globul nunciul downtuin iesulting
liom tle nunciul ciisis ol 2008/9 lus
piomptedmunygoveinmentstoievisit
tleii scul policy. In Switzeilund, sucl
unulysisieveulsuielutivelysolidlevel
ol stute nuncing und u modeiute level
olpublicdebt.Tlisleultlybulunce
between public spending und scul
ievenuesullowsSwitzeilundtoietuinu
ielutively uttiuctive scul enviionment,
cluiucteiisedbystubilityundgiuduul
butsteudyimpiovement.Tleuoing
BusincssundPuyingTuxesstudies
documenttlissustuinubleputl.
SincePuyingTuxcs2006wuspublisled,
tleSwissiesultsluveiemuinedviituully
tlesume,witlonlyminoivuiiuncesin
tleTotulTuxRute(TTR).Itslouldbe
notedtluttleSwisscoipoiuteincome
tuxiuteoneoltlemostimpoitunt
componentsoltleTTRvuiiesdueto
cuntonultuxluws,wliclcuncuusetux
iutestodilleiquitesubstuntiully.Zuiicl,
tlelocutionloitlecusestudycompuny
intlisstudy,iunksutubouttleuveiuge
olullcuntons.Moieovei,inteinutionul
businessesopeiutingoutolSwitzeilund
muyulsoquulilyloiloweicoipoiutetux
iutesilceituinconditionsupply.
Tleieluvebeenunumbeioliecent
clungesintletuxluwinSwitzeilund.
Foidiiectledeiultuxpuiposes,tle
conditionsloitleupplicutionol
puiticiputionielielwillbeieluxed
usol2011.Tlecuntonswillluveto
implementtlistoo,tlougltimingmuy
vuiy.Tlecupitulcontiibutionpiinciple
willulsobeintioduced,ullowing
contiibutedsuiplustobeietuinedto
sluieloldeislieeolSwisswitllolding
tuxliom2011.FiomAugust2010,tle
so-culled 10/20 non-bunk iule lus been
ieluxed(i.e.witlloldingtuxundstump
duties uie eliminuted on intei-compuny
tieusuiyuctivitiesilceituinconditions
uiemet).
Moieovei,uspuitoltleunnounced
coipoiutetuxieloim,luitlei
impiovementstotlecoipoiuteincome
tuxiegulutionsuiecuiientlybeing
developed.Amongtlepioposuls
discusseduietlelollowing:tleubolition
olissuuncestumpduty,luitleiclunges
totlepuiticiputionielielsystem,und
tleintioductionoltleubilitytocuiiy
loiwuidtuxlosseswitloutlimitution
(cuiientlylimitedtosevenyeuis).
Tlese ievisions will benet ull
compuniesinSwitzeilund,including
smullundmediumsizedenteipiises
onwlicltlePuyingTuxesunulysis
isbused.Tleywillulsolelptosettle
ongoingissueswitltleEuiopeunUnion
conceiningpieleientiultuxiegimesund
tostiengtlenSwitzeilundsposition
usuieliubleunduttiuctivelocutionloi
inteinutionulinvestment.
Progress during the
crisis and beyond
Switzerland
2011 2006
Armin Marti, PwC Switzerland
Olleiing u scul enviionment wlicl is
uttiuctivetointeinutionulbusinesses
isolvitulimpoituncetoSwitzeilund,
beuiinginmindtlecountiyssmull
size,itslimiteddomesticmuiketund
tle ubsence ol uny signicunt nutuiul
iesouices tlut could be scully exploited.
Switzeilundlusieulisedtlut,inoidei
topiovideustubleundpiospeious
legul und scul enviionment beyond
nutionulboideis,itisnecessuiyto
ensuie cioss-boidei tiunspuiency. Tle
Swissgoveinmentlustleieloieiecently
ucceptedtleOECDsinloimution
exclungestunduids.Bycombining
uloculuppiouclwitlinteinutionul
coopeiutionundpuitneislips,
Switzeilundiepiesentsucountiywitl
uninteinutionullycompetitiveund
tiunspuienttuxsystem.
London losted tle ist globul luuncl
eventloiPuyingTuxesinNovembei
2006.Attlistime,tleUKluduiunking
ol11outoltle178economiesincluded
intlestudy.Sincetlen,tleUKs
positionlusgiuduullylullentoucuiient
iunkingol16.Clungestlutluvebeen
mudetotleUKtuxsystemduiingtlis
time uie cleuily ieected in tle Puying
Tuxesiesults.
TleclungeintleTotulTuxRute(TTR)
lus lud tle most signicunt impuct on
tleoveiulliesult.AltlougltleUKs
stututoiyiuteloicoipoiutiontuxlus
lullen,otleiclungestotletuxsystem
luveiesultedinunincieuseintle
umountoltuxpuidbyouicusestudy
compuny.Tleieductionintleiuteut
wliclcupitulullowuncescunbecluimed
loi tle puicluse ol xed ussets und
equipmentlusludupuiticuluiimpuct.
TlenumbeiolpuymentsintleUKlus
iemuined constunt ut eiglt, ieecting tle
puyment ol one piot tux (coipoiution
tux),onelubouitux(nutionulinsuiunce
contiibutions),undsixotleituxes
(including VAT, business iutes, lundll
tux,veliclelicencetux,insuiunce
piemiumtuxundluelduty).Howevei,
tleUKluslullenbelindotleicountiies
wliclluveimpiovedtleiisystemswitl
electionic ling und jointpuyments.
Tlenumbeiollouisiequiiedloitux
compliuncelusincieusedsligltlyto110.
Tlis ieects tle iecent clunges tlut luve
beenmudetotleiuteolVATundtle
necessuiyudditionuludministiutiontlut
wusiequiiedtoimplementtleclunge.
Asloimunyotleieconomies,tlelust
twoyeuisluvebeenupuiticuluily
tuibulentpeiiodloitleUK,witl
tlebunkingciisisbeginningin2008
undcontinuingtliouglout2009.It
isonlysincetleendol2009tluttle
UKeconomylusgiuduullymovedout
oliecession.Buttlepuceolgiowtl
iemuinsslowundtleiecessionluslelt
tle countiy witl u luige stiuctuiul decit
todeulwitl.
In2010,tleUKelectedunewcoulition
goveinmentwlicllusstutedtlutits
piioiityievolvesuioundtucklingtlis
decit. Tle tliee key tools ut its disposul
uie elciency suvings, spending cuts und
tletuxsystem.Initsemeigencybudget
inJune2010,tlegoveinmentsetoutu
ve-yeui plun. Tlis included u ieduction
intlemuiniuteolcoipoiutiontuxliom
28%to24%oveitlecouiseolloui
yeuisliomApiil2011.Aieductionin
tlesmullcompuniesiuteto20%isulso
plunnedliomApiil2011.Botltlese
meusuiesuieuimedutensuiingtleUK
tuxsystemiemuinsuttiuctiveulongside
peeigioupeconomies.
Howevei,tleiuteutwliclcupitul
ullowuncedeductionsuieuvuilubleloi
cupitulspendwillulsolullluitleito
bettei ieect economic depieciution
iutes.AndtleiutesloiInsuiunce
PiemiumTuxundVATuiedueto
incieuseliomJunuuiynextyeui,ulong
witl tle iute loi lundll tux liom
Apiil2011.
Coming out of
the recession
and facilitating
EXVLQHVVbJURZWK
United Kingdom
2011 2006
Barry Marshall, PwC UK
WitltleexceptionoltleVATclunge,
wecunexpecttlutulloltleseclunges
willluveunimpuctontleTTRloioui
cusestudycompunyintleUK.Tle
clungestotleVATiutewillnotlowevei
ullecttleTTR,ustlisisnotutuxboine
loiouicusestudycompuny.But,subject
tounyotleiclungestlutmigltluveun
impuctontleudministiutivepioceduies
loicompliunce,tlepioposedVAT
clungeswilliesultinunincieuseintle
time-to-comply to ieect tle extiu time
neededtodeulwitltleiutesclunges.
Gettingtlebulunceiigltbetween
iuisingievenuesundensuiingtlut
businessuctivityisnotinlibitediskey.
OtleiieseuiclundeitukenbyPwCin
tle2010editionoltleC|obu|lumi|y
Busincsssutvcy,undinlustyeuis
Fnrctptising0ksutvcysuggeststlut
businessisstillconceinedubouttletux
system.Tleieisupleuliombusinessloi
simpletuxiules,ieducedudministiutive
buidenund,mostolull,loiupeiiodol
ceituintyundstubilityintletuxsystem.
TlePuyingTuxesiesultsloiZumbiu
luveclungedlittlesince2006.Tle
TotulTuxRute(TTR)lusieducedonly
sligltly,wliletleielusbeennoclunge
intletimetocomplyoiintlenumbei
olpuyments.
TlelowTTRisluigelyuiesultol
tlegoveinmentpiioiitisingtle
munuluctuiingindustiyusupotentiul
giowtl uieu. A numbei ol scul
incentivesluvebeengiuntedincluding
S0%cupitulullowunces,u10%initiul
ullowunceoninvestmentsinindustiiul
buildings,undu10%investment
ullowunce.Tleseincentivesdiivedown
tlecoipoiuteincometuxelementoltle
TTRsotluttleellectiveiuteismucl
loweitluntlestututoiycoipoiute
incometuxiute(ieleiiedtoonpuge
32oltlispublicution).Altlouglnot
upplicubletoouicusestudycompuny,
tleieuieudditionulincentivesuvuiluble
totlemunuluctuiingsectoi,witltle
stututoiycoipoiuteincometuxiute
ieducedto1S%loiincomeielutingto
tle expoit ol non-tiuditionul pioducts.
Tlegoveinmentlusulsoimplemented
incentiveiegimesinielutiontotle
tuxcostlocusedonsectoissuclus
mining,ugiicultuie,undtouiism.
Witlminingbeingtlemujoisouiceol
loieignexclungeloitlecountiy,und
witltleiecentcoppeipiiceiecoveiy
oninteinutionulmuikets,goveinment
luscomeundeiincieusingpiessuieto
ieintioducetlewindlulltuxonmining
piots to incieuse tle tux tuke liom
tlissectoi.
Inudditiontoits12VATpuyments,
TuxpuyeiCoulsolus12puymentsto
muke loi pension contiibutions, ve
puymentsloicoipoiuteincometux,
louimotoiveliclelicensepuyments,
undonepuymenteuclloiinteiestund
medicullevy,piopeitytiunslei,woikeis
compensutionundlueltux.Elloitsluve
beenmudetoeusetlebuidenolpuying
tlesetuxes,witltleintioductionolun
electionicpuymentsystemwliclullows
compuniestopuytleiituxbyelectionic
tiunslei.Buttlepuymentsindicutoiloi
ZumbiuintlePuyingTuxesstudyisstill
ligl,ustlecountiydoesnotyetluveun
electionic ling system.
TuxpolicyisontleZumbiun
goveinmentsugenduundlollowing
tleintioductionoltleCustomei
Cluiteibytleievenueuutloiityin
2009,tleieuiecontinuingelloitsbeing
mudetoimpioveseivicedeliveiyloi
tletuxpuyei.Tlecluiteisetsoutu
commitment to impiove elciency witl
someminimumstunduids.Itiemuins
tobeseenwletleitleseinitiutives
impiovetletuxenviionmentloi
compunies likeTuxpuyeiCo.
Incentives for
business investment
Zambia
2011 2006
Jyoti Mistry, PwC Zambia
The Paying Taxes
methodology
Appendlx1:TlePuyingTuxcsmetlodology
uoingBusincssiecoidstletuxes
undmundutoiycontiibutionstlutu
medium-sizecompunymustpuyinu
givenyeuiuswellusmeusuiingtle
udministiutivebuidenolpuyingtuxes
undcontiibutions.Tlepiojectwus
developedundimplementedbytle
WoildBunkundIFCincoopeiutionwitl
PwC.Tuxesundcontiibutionsmeusuied
include piot oi coipoiute income tux,
sociulcontiibutionsundlubouituxes
puid by tle employei, piopeity tuxes,
piopeity tiunslei tuxes, dividend tux,
cupitul guins tux, nunciul tiunsuctions
tux, wuste collection tuxes, velicle und
ioud tuxes, und uny otlei smull tuxes
oilees.Tleiunkingontleeuseol
puyingtuxesistlesimpleuveiugeoltle
peicentileiunkingsonitscomponent
indicutois(seediugiumopposite).
Figure A1.1
Paying Taxes: tax compliance for a local manufacturing company
Rankings are based on three sub-indicators
Time (33.3%):
Number of hours per year to
prepare, le returns and pay taxes
Payments (33.3%):
Number of tax payments per year
Total Tax Rate (33.3%):
Firm tax liability as % of
prots before all taxes borne
uoingBusincssmeusuiesulltuxesund
contiibutionstlutuiegoveinment-
munduted (wletlei ledeiul, stute
oi locul), und wlicl upply to tle
stunduidisedbusinessundluveun
impuct in its nunciul stutements. In
doing so, uoingBusincssgoesbeyond
tle tiuditionul denition ol u tux. As
dened loi tle puiposes ol goveinment
nutionul uccounts, tuxes include only
compulsoiy, uniequited puyments to
geneiulgoveinment.uoingBusincss
depuits liom tlis denition becuuse it
meusuiesimposedcluigestlutullect
business uccounts, not goveinment
uccounts.Tlemuindilleiencesielute
tolubouicontiibutions.Tleuoing
Busincssmeusuieincludesgoveinment-
mundutedcontiibutionspuidbytle
employei to u iequited piivute pension
lundoiwoikeisinsuiuncelund.
Tle indicutoi includes, loi exumple,
Austiulius compulsoiy supeiunnuution
guuiunteeundwoikeiscompensution
insuiunce. It slould ulso be noted tlut,
loitlepuiposeolculculutingtleTotul
Tux Rute (TTR) (dened lutei in tlis
section), only tuxes boine uie included.
Foi exumple, vulue udded tuxes uie
geneiullyexcluded(piovidedtley
uienotiiiecoveiuble)becuusetley
do not ullect tle uccounting piots
ol tle business tlut is, tley uie not
ieected in tle income stutement. Tley
uieloweveiincludedloitlepuipose
oltlecompliuncemeusuies(timeund
puyments)ustleyuddtotlebuidenol
complyingwitltletuxsystem.
uoingBusincssusesucusestudyscenuiio
tomeusuietletuxesundcontiibutions
puidbyustunduidisedbusinessund
tlecomplexityoluneconomystux
compliuncesystem.Tliscusescenuiio
uses u set ol nunciul stutements und
ussumptionsubouttiunsuctionsmude
oveitleyeui.Tuxexpeitsliomunumbei
ol dilleient ims in eucl economy
(including PwC), compute tle tuxes und
mundutoiycontiibutionsdueintleii
juiisdiction, bused on tle stunduidised
cusestudylucts.Inloimutionisulso
compiled on tle liequency ol ling und
puyments, us well us tle time tuken to
complywitltuxluwsinuneconomy.
Tletimelineoveileulsummuiisestle
unnuulpiocessloicollectingtlePuying
Tuxesdutu.
Questionnaire is
reviewed by the World
Bank, IFC and PwC
Paying Taxes teams.
Improvements to
indicator and non-
indicator questions
implemented.
Clearance of revised
questionnaire by
World Bank and IFC
management team.
Distribution of the
questionnaire by
the World Bank
and IFC team to
the contributors
in each economy,
including PwC.
Completion of the
questionnaire by
contributors with a
facility to raise queries
with the World Bank
and IFC.
January February March April May June
Tomuketledutucompuiubleucioss
economies, u numbei ol ussumptions
ubouttlebusinessundtletuxesund
contiibutionsuieused.
Assumptions about
WKHbEXVLQHVV
Tlebusiness:
is u limited liubility, tuxuble compuny.
Iltleieismoietlunonetypeol
limitedliubilitycompunyintle
economy, tle limited liubility loim
most popului umong domestic ims
isclosen.Tlemostpopuluiloimis
iepoitedbyincoipoiutionluwyeisoi
tle stutisticul olce.
stuitedopeiutionson1Junuuiy2008.
At tlut time, tle compuny puiclused
ulltleussetsslowninitsbulunce
sleet und liied ull itswoikeis.
opeiutesintleeconomysluigest
businesscity.
is100%domesticullyownedund
lus ve owneis, ull ol wlom uie
nutuiulpeisons.
lusustuit-upcupitulol102times
incomepeicupituuttleendol2008.
peiloimsgeneiulindustiiuloi
commeiciul uctivities. Specicully,
it pioduces ceiumic oweipots
undsellstlemutietuil.Itdoesnot
puiticiputeinloieigntiude(no
impoitoiexpoit)unddoesnot
lundlepioductssubjecttouspeciul
tux iegime (loi exumple, liquoi
oitobucco).
ut tle beginning ol 2009, owns
two plots ol lund, one building,
muclineiy, olce equipment,
computeisundonetiuck.Itulso
leusesonetiuck.
does not quulily loi investment
incentives oi uny benets upuit liom
tloseielutedtotleugeoisizeol
tlecompuny.
Figure A1.2
Timeline summarising the annual process for collecting the Paying Taxes data
Dialogue with governments on the results for individual economies and regions
Input from users of the publication and other interested parties including international organisations and institutions
Review of the questionnaires submitted by the
World Bank and IFC team. Identication of issues
arising from the data, and investigation of these
with the contributors (typically there are four
rounds of interaction between the contributors
and the World Bank and IFC team).
Any suggested changes to the indicators are
investigated further with the contributors and then
veried with other third party contributors. The
change is only made if it is substantiated.
Finalisation and input of the data into the World
Bank and IFC model.
Calculation and nalisation of the indicators
and rankings.
Clearance of these gures with the World Bank
and IFC management.
Drafting of the Paying Taxes publication.
July August September October November December
lus 60 employees: loui munugeis,
eiglt ussistunts und 48 woikeis. All
uie nutionuls, und one munugei is
ulsounownei.Tlecompunypuys
unudditionulmediculinsuiunce
loiemployees(notmundutedby
uny luw) us un udditionul benet.
In uddition, in some economies,
ieimbuisublebusinesstiuvelund
cliententeituinmentexpensesuie
consideied liinge benets. Wlen
upplicuble, we ussume tlut tle
compuny puys tle liinge benet tux
on tlis expense oi tlut tle benet
becomestuxubleincomeloitle
employee.Tlecusestudyussumesno
udditionul suluiy udditions loi meuls,
tiunspoitution, educution, oi otleis.
Tleieloie, even wlen sucl benets
uie liequent, tley uie not udded to
oiiemovedliomtletuxublegioss
suluiiestouiiiveuttlelubouituxoi
contiibutionculculution.
lus u tuinovei ol 1,0S0 times income
peicupitu.
mukes u loss in tle ist yeui
olopeiution.
lusugiossmuigin(pie-tux)ol20%
(i.e.sulesuie120%oltlecostol
goodssold).
distiibutes S0% ol its net piots us
dividendstotleowneisuttleendol
tlesecondyeui.
sells one ol its plots ol lund ut u piot
uttlebeginningoltlesecondyeui.
lusunnuulluelcostsloiitstiucks
equul to twice income pei cupitu.
issubjecttouseiiesoldetuiled
ussumptionsonexpensesund
tiunsuctionstoluitleistunduidise
tle cuse. All nunciul stutement
vuiiubles uie piopoitionul to 200S
income pei cupitu. Foi exumple,
tleownei(wloisulsoumunugei)
spends10%olincomepeicupitu
ontiuvellingloitlecompuny
(20%oltlisowneisexpenses
uie puiely piivute, 20% uie loi
enteituiningcustomeisund60%loi
businesstiuvel).
Assumptions about the taxes
and contributions
All tle tuxes und contiibutions
iecoideduietlosepuidintle
secondyeuiolopeiution(culendui
yeui 2009). A tux oi contiibution
isconsideieddistinctilitlusu
dilleientnumeoiiscollected
byudilleientugency.Tuxesund
contiibutionswitltlesumenume
und ugency, but wlicl uie cluiged
utdilleientiutesdependingontle
business, uie counted us tle sume tux
oi contiibution.
Tlenumbeioltimestlecompuny
puystuxesundcontiibutionsin
uyeuiistlenumbeioldilleient
tuxesoicontiibutionsmultiplied
by tle liequency ol puyment (oi
witllolding)loieucltux.Tle
liequency ol puyment includes
udvuncepuyments(oiwitllolding)
uswellusieguluipuyments
(oiwitllolding).
Feedback of the nal results to government
representatives.
Feedback of the nal results to the contributors
Drafting of the World Bank and IFC Paying Taxes
chapter for inclusion in the Doing Business
publication and clearance with World Bank and
IFC management.
Independent PwC analysis of indicator and non-indicator data to determine
a PwC perspective. Focus on geographical and economic groupings.
Launch of the Paying Taxes report and online
data. Regional launch events for the Paying
Taxes report.
Launch of the Doing
Business report and
online data.
What does Paying Taxes
measure?
TaxPayments
Tle tux puyments indicutoi ieects tle
totulnumbeioltuxesundcontiibutions
puid, tle metlod ol puyment, tle
liequency ol puyment, tle liequency
ol ling und tle numbei ol ugencies
involvedloitlisstunduidisedcusestudy
compunyduiingtlesecondyeuiol
opeiution (see guie A1.3). It includes
consumption tuxes puid by tle compuny,
suclussulestuxoivulueuddedtux.
Tlesetuxesuietiuditionullycollected
liomtleconsumeionbelulloltletux
ugencies. Altlougl tley do not ullect
tle income stutements ol tle compuny,
tleyuddtotleudministiutivebuidenol
complyingwitltletuxsystemundsouie
includedintletuxpuymentsmeusuie.
Tlenumbeiolpuymentstukesinto
uccount electionic ling. Wleie lull
electionic ling und puyment is ullowed,
unditisusedbytlemujoiityolmedium-
size businesses, tle tux is counted us
puid once u yeui even il lings und
puyments uie moie liequent. Foi
puyments mude tliougl tliid puities,
sucl us tux on inteiest puid by u nunciul
institutionoilueltuxpuidbyuluel
distiibutoi, only one puyment is included
even il puyments uie moie liequent.
Wleietwooimoietuxesoi
contiibutions uie led loi und puid
jointly using tle sume loim, eucl ol
tlesejointpuymentsiscountedonce.
Foi exumple, il mundutoiy leultl
insuiuncecontiibutionsundmundutoiy
pension contiibutions uie led loi
und puid togetlei, only one ol tlese
contiibutionswouldbeincludedintle
numbeiolpuyments.
Tlme
Timeisiecoidedinlouispeiyeui.
Tleindicutoimeusuiestletimetukento
piepuie, le und puy tliee mujoi types
oltuxesundcontiibutions:coipoiute
income tux, vulue udded oi sules tux,
und luboui tuxes, including puyioll tuxes
undsociulcontiibutions.Piepuiution
timeincludestletimetocollectull
inloimutionneededtocomputetletux
puyubleundtoculculutetleumount
puyuble.Ilsepuiuteuccountingbooksuie
iequiied loi tux puiposes oi sepuiute
culculutionsmudetletimeussociuted
witltlesepiocessesisincluded.Tlis
extiutimeisincludedonlyiltleiegului
uccounting woik is not enougl to lull
tle tux uccounting iequiiements. Filing
timeincludestletimetocompleteull
necessuiy tux ietuin loims und le tle
ielevuntietuinsuttletuxuutloiity.
Puymenttimeconsideistlelouis
neededtomuketlepuymentonlineoi
uttletuxuutloiities.Wleietuxesund
contiibutions uie puid in peison, tle
timeincludesdeluyswlilewuiting.
Figure A1.3
What do the Paying Taxes sub-indicators measure?
Tax payments for a manufacturing company in 2009 (number per year adjusted for electronic or
joing ling and payment)
Total number of taxes and contributions paid, including consumption taxes (value added tax, sales tax
or goods and service tax)
Method and frequency of ling and payment
Time required to comply with three major taxes (hours per year)
Collecting information and computing the tax payable
Completing tax return forms, ling with proper agencies
Arranging payment or withholding
Preparing seperate tax accounting books, if required
Prot or corporate income tax
Social contributions and labour taxes paid by the employer
Property and property transfer taxes
Dividend, capital gains and nancial transactions taxes
Waste collection, vehicle, road and other taxes
TotalTaxRate{TTR)
TleTTRmeusuiestleumountol
tuxesundmundutoiycontiibutions
boinebytlebusinessintlesecond
yeui ol opeiution, expiessed us u sluie
ol commeiciul piot. uoingBusincss
2011iepoitstleTTRloiculendui
yeui2009.Tletotulumountoltuxes
boineistlesumolulltledilleient
tuxesundcontiibutionspuyubleultei
uccountingloiullowubledeductionsund
exemptions.Tletuxeswitlleld(sucl
uspeisonulincometux)oicollectedby
tlecompunyundiemittedtotletux
uutloiities (sucl us vulue udded tux,
sulestuxoigoodsundseivicetux)but
wlicl uie not boine by tle compuny,
uieexcluded.Tletuxesincluded
cun be divided into ve cutegoiies:
piot oi coipoiute income tux; sociul
contiibutionsundlubouituxespuidby
tleemployei(iniespectolwliclull
mundutoiy contiibutions uie included,
evenilpuidtoupiivuteentitysucl
us u iequited pension lund); piopeity
tuxes; tuinovei tuxes; und otlei tuxes
(suclusmunicipulleesundvelicleund
lueltuxes).
TleTTRisdesignedtopiovideu
compielensivemeusuieoltlecostol
ulltletuxesubusinessbeuis.Itdilleis
liom tle stututoiy tux iute, wlicl
meielypiovidestleluctoitobeupplied
to tle tux buse. In computing tle TTR,
tleuctuultuxpuyubleisdividedby
commeiciul piot. Dutu loi Sweden
is slown in guie A1.4 to illustiute
tleculculution.
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.
In computing commeiciul piot, tlese
tuxesuienotdeductible.Commeiciul
piot tleieloie piesents u cleui pictuie
ol tle uctuul piot ol u business beloie
unyoltletuxesitbeuisintlecouiseol
tle scul yeui.
Commeiciul piot is computed us
sules minus cost ol goods sold, minus
gioss suluiies, minus udministiutive
expenses, minus otlei expenses,
minus piovisions, plus cupitul guins
(liomtlepiopeitysule)minusinteiest
expense, plus inteiest income und minus
commeiciuldepieciution.Tocompute
tle commeiciul depieciution, u stiuiglt-
line depieciution metlod is upplied, witl
tle lollowing iutes: 0% loi tle lund, S%
loi tle building, 10% loi tle muclineiy,
33% loi tle computeis, 20% loi tle
olce equipment, 20% loi tle tiuck und
10%loibusinessdevelopmentexpenses.
Commeiciul piot umounts to S9.4 times
incomepeicupitu.
Tlemetlodologyloiculculutingtle
TTRisbioudlyconsistentwitltleTotul
TuxContiibutionliumewoikdeveloped
byPwCundtleculculutionwitlintlis
liumewoikloituxesboine.Butwlile
tlewoikundeitukenbyPwCisusuully
busedondutuieceivedliomtleluigest
compunies in tle economy, uoing
Busincsslocusesonucusestudyloiu
stunduidisedmedium-sizecompuny.
Figure A1.4
Computing the TTR for Sweden
Statutory
rate (r)
Statutory tax
base (b)
Actual tax
payable (a)
Commercial
prot* (c) TTR (t)
a = r x b t = a/c
Type of tax (tax base) SKr SKr SKr
Corporate income tax
(taxable income)
28% 10,330,966 2,892,670 17,619,223 16.4%
Real estate tax (land and
buildings)
0.38% 26,103,545 97,888 17,619,223 0.6%
Payroll tax (taxable wages) 32.42% 19,880,222 6,445,168 17,619,223 36.6%
Fuel tax (fuel price)
SKr 4.16
per litre
45,565 litres 189,550 17,619,223 1.1%
Total 9,625,276 54.6%
*Prot before all taxes borne
Note: SKr is Swedish kronor. Commercial prot is assumed to be 59.4 times income per capita
About Doing Business:
measuring for impact
Commentuiyliomtle
WoildBunkundIFC
Appendlx2:AboutuoingBusincss.meusuiingloiimpuct
Goveinmentscommittedtotleeconomic
leultloltleiicountiyundoppoitunities
loiitscitizenslocusonmoietlun
mucioeconomicconditions.Tleyulso
puyuttentiontotleluws,iegulutions
undinstitutionuluiiungementstlut
slupe duily economicuctivity.
Tle globul nunciul ciisis lus ienewed
inteiestingoodiulesundiegulution.
Intimesoliecession,ellectivebusiness
iegulutionundinstitutionscun
suppoiteconomicudjustment.Eusy
entiy und exit ol ims, und exibility
iniedeployingiesouices,mukeit
eusieitostopdoingtlingsloiwlicl
demundlusweukenedundtostuit
doing new tlings. Cluiicution ol
piopeityiigltsundstiengtleningol
muiketinliustiuctuie(suclusciedit
inloimutionundcolluteiulsystems)cun
contiibute to condence us investois und
entiepieneuislooktoiebuild.
Untiliecently,lowevei,tleieweie
noglobullyuvuilubleindicutoisets
loimonitoiingsuclmicioeconomic
luctoisundunulysingtleiiielevunce.
Tle ist elloits, in tle 1980s, diew on
peiceptionsdutuliomexpeitoibusiness
suiveys.Suclsuiveysuieuselulguuges
oleconomicundpolicyconditions.But
tleiiieliunceonpeiceptionsundtleii
incompletecoveiugeolpooicountiies
constiuintleiiuselulnessloiunulysis.
TleuoingBusincsspioject,initiuted
nineyeuisugo,goesonestepluitlei.It
looksutdomesticsmullundmedium-size
compuniesundmeusuiestleiegulutions
upplyingtotlemtliougltleiililecycle.
uoingBusincssundtlestunduidcost
modelinitiullydevelopedunduppliedin
tleNetleilundsuie,loitlepiesent,tle
onlystunduidtoolsuseduciossubioud
iungeoljuiisdictionstomeusuietle
impuctolgoveinmentiule-mukingon
tlecostoldoingbusiness.
1
Tle ist uoingBusincssiepoit,publisled

in 2003, coveied ve indicutoi sets und
133 economies. Tle uoingBusincss
2011 iepoit coveis 11 indicutoi sets und
183 economies. uoingBusincsstukes
tlepeispectiveoldomestic,piimuiily
smulleicompuniesundmeusuiestle
iegulutionsupplyingtotlemtliougl
tleiililecycle.Economiesuieiunked
ontlebusisolnineuieusoliegulution
loistuitingubusiness,deulingwitl
constiuctionpeimits,iegisteiing
piopeity,gettingciedit,piotecting
investois,puyingtuxes,tiudingucioss
boideis,enloicingcontiuctsund
closingubusiness.Inuddition,dutuuie
piesentedloiiegulutionsonemploying
woikeisund,loiusetolpilotindicutois,
ongettingelectiicity.Tlepioject
lus beneted liom leedbuck liom
goveinments,ucudemics,piuctitioneis
undievieweis.
2
Tleinitiulgoul
iemuins:topiovideunobjectivebusis
loiundeistundingundimpiovingtle
iegulutoiyenviionmentloibusiness.
What Doing Business covers
uoingBusincsspiovidesuquuntitutive
meusuieoliegulutionsloistuitingu
business,deulingwitlconstiuction
peimits,iegisteiingpiopeity,getting
ciedit,piotectinginvestois,puying
tuxes,tiudinguciossboideis,enloicing
contiuctsundclosingubusinessustley
upplytodomesticsmullundmedium-size
enteipiises.Itulsolooksutiegulutions
onemployingwoikeisuswellusunew
meusuieongettingelectiicity.
AlundumentulpiemiseoluoingBusincss
istluteconomicuctivityiequiiesgood
iules.Tleseincludeiulestlutestublisl
undcluiilypiopeityiigltsundieduce
tlecostoliesolvingdisputes,iules
tlutincieusetlepiedictubilityol
economicinteiuctionsundiulestlut
piovidecontiuctuulpuitneiswitlcoie
piotectionsuguinstubuse.Tleobjective:
iegulutions designed to be elcient in
tleiiimplementution,tobeuccessible
toullwloneedtousetlemundto
besimpleintleiiimplementution.
Accoidingly,someuoingBusincss
indicutoisgiveuligleiscoieloi
moieiegulution,suclusstiictei
disclosuieiequiiementsinieluted-puity
tiunsuctions.Somegiveuligleiscoie
loi u simplied wuy ol implementing
existingiegulution,sucluscompleting
businessstuit-uploimulitiesinuone-
stopslop.
TleuoingBusincsspiojectencompusses
two types ol dutu. Tle ist come liom
ieudingsolluwsundiegulutions.Tle
seconduietimeundmotionindicutois
tlut meusuie tle elciency in uclieving
uiegulutoiygoul(suclusgiuntingtle
legulidentityolubusiness).Witlin
tletimeundmotionindicutois,cost
estimutes uie iecoided liom olciul
leescleduleswleieupplicuble.
3
Heie,
uoingBusincssbuildsonHeinundode
Sotospioneeiingwoikinupplyingtle
time und motion uppioucl ist used by
FiedeiickTuyloitoievolutionisetle
pioductionoltleModelTFoid.DeSoto
used tle uppioucl in tle 1980s to slow
tleobstuclestosettingupuguiment
luctoiyontleoutskiitsolLimu.
4
What Doing Business does

QRWbFRYHU
Justusimpoituntusknowingwlutuoing
Busincssdoesistoknowwlutitdoesnot
dotoundeistundwlutlimitutionsmust
be kept in mind in inteipieting tledutu.
Llmltedlnscope
uoingBusincss locuses on 11 topics,
witl tle specic uim ol meusuiing tle
iegulutionundiedtupeielevunttotle
lilecycleoludomesticsmulltomedium-
size im. Accoidingly:
uoingBusincssdoesnotmeusuieull
uspectsoltlebusinessenviionment
tlut muttei to ims oi investois oi
ullluctoistlutullectcompetitiveness.
Itdoesnot,loiexumple,meusuie
secuiity,mucioeconomicstubility,
coiiuption,tlelubouiskillsol
tlepopulution,tleundeilying
stiengtlolinstitutionsoitle
quulityolinliustiuctuie.
S
Noidoes
it locus on iegulutions specic to
loieigninvestment.
uoingBusincssdoesnotussesstle
stiengtl ol tle nunciul system oi
muiketiegulutions,botlimpoitunt
luctoisinundeistundingsomeol
tleundeilyingcuusesoltleglobul
nunciul ciisis.
uoingBusincssdoesnotcoveiull
iegulutions,oiulliegulutoiygouls,
inunyeconomy.Aseconomiesund
teclnologyudvunce,moieuieus
oleconomicuctivityuiebeing
ieguluted.Foiexumple,tleEuiopeun
Unionsbodyolluws(ucquis)lus
now giown to no lewei tlun 14,S00
iulesets.uoingBusincsscoveis
11 uieus ol u compunys lile cycle,
tliougl 11 specic sets ol indicutois.
Tleseindicutoisetsdonotcoveiull
uspectsoliegulutionintleuieuol
locus.Foiexumple,tleindicutois
onstuitingubusinessoipiotecting
investoisdonotcoveiulluspects
olcommeiciullegislution.Tle
employingwoikeisindicutoisdonot
coveiulluieusollubouiiegulution.
Tlecuiientindicutoisetdoesnot
include,loiexumple,meusuiesol
iegulutionsuddiessingsuletyutwoik
oitleiigltolcollectivebuiguining.
1
The standard cost model is a quantitative methodology for determining the administrative burdens that regulation imposes on businesses. The method can be used to measure the effect of a single
law or of selected areas of legislation or to perform a baseline measurement of all legislation in a country.
2
This has included a review by the World Bank Independent Evaluation Group (2008) as well as ongoing input from the International Tax Dialogue.
3
Local experts in 183 economies are surveyed annually to collect and update the data. The local experts for each economy are listed on the Doing Business website (http://www.doingbusiness.org).
4
De Soto (2000).
5
The indicators related to trading across borders and dealing with construction permits and the pilot indicators on getting electricity take into account limited aspects of an economys infrastructure,
including the inland transport of goods and utility connections for businesses.
82 Paying Taxes. November 2010
Basedonstandardlsed
casescenarlos
uoingBusincssindicutoisuiebuilton
tlebusisolstunduidisedcusescenuiios
witl specic ussumptions, sucl us tle
businessbeinglocutedintleluigest
businesscityoltleeconomy.Economic
indicutoiscommonlymukelimiting
ussumptions ol tlis kind. Inution
stutistics,loiexumple,uieoltenbused
onpiicesolconsumeigoodsinulew
uibunuieus.
Suclussumptionsullowglobulcoveiuge
undenluncecompuiubility.Buttley
comeuttleexpenseolgeneiulity.uoing
Busincssiecognisestlelimitutions
olincludingdutuononlytleluigest
businesscity.Businessiegulution
unditsenloicement,puiticuluilyin
ledeiulstutesundluigeeconomies,
dilleiuciosstlecountiy.Andolcouise
tleclullengesundoppoitunitiesol
tleluigestbusinesscitywletlei
MumbuioiSoPuulo,Nukuuloluoi
Nussuuvuiygieutlyuciosscountiies.
Recognisinggoveinmentsinteiest
insuclvuiiution,uoingBusincsslus
complementeditsglobulindicutoiswitl
subnutionulstudiesinsuclcountiies
usBiuzil,Clinu,Colombiu,tleAiub
RepublicolEgypt,Indiu,Indonesiu,
Kenyu,Mexico,Moiocco,Nigeiiu,
Pukistun und tlePlilippines.
6
Inuieuswleieiegulutioniscomplexund
ligllydilleientiuted,tlestunduidised
cuseusedtoconstiucttleuoingBusincss
indicutoi needs to be cuielully dened.
Wleieielevunt,tlestunduidisedcuse
ussumesulimitedliubilitycompuny.
Tliscloiceisinpuitempiiicul:piivute,
limitedliubilitycompuniesuietle
mostpievulentbusinessloiminmost
economiesuioundtlewoild.Tle
cloice ulso ieects one locus ol uoing
Busincss:expundingoppoitunities
loientiepieneuislip.Investoisuie
encouiugedtoventuieintobusiness
wlenpotentiullossesuielimitedtotleii
cupitulpuiticipution.
FocusedontheIormalsector
Inconstiuctingtleindicutois,uoing
Busincssussumestlutentiepieneuisuie
knowledgeubleuboutulliegulutionsin
pluceundcomplywitltlem.Inpiuctice,
entiepieneuismuyspendconsideiuble
time nding out wleie to go und wlut
documentstosubmit.Oitleymuyuvoid
legullyiequiiedpioceduiesultogetlei
bynotiegisteiingloisociulsecuiity,
loiexumple.
Wleieiegulutionispuiticuluily
oneious,levelsolinloimulityuieliglei.
Inloimulity comes ut u cost: ims in
tleinloimulsectoitypicullygiowmoie
slowly,luvepooieiuccesstociedit
undemployleweiwoikeisundtleii
woikeisiemuinoutsidetlepiotections
ollubouiluw.
7
uoingBusincssmeusuies
onesetolluctoistlutlelpexpluintle
occuiienceolinloimulityundgive
policymukeisinsigltsintopotentiul
uieusolieloim.Guiningulullei
undeistundingoltlebioudeibusiness
enviionment,undubioudeipeispective
onpolicyclullenges,iequiiescombining
insigltsliomuoingBusincsswitldutu
liomotleisouices,suclustleWoild
BunkEnteipiiseSuiveys.
8
Methodology and data
uoingBusincss coveis 183 economies
includingsmulleconomiesundsome
oltlepooiestcountiies,loiwlicllittle
oinodutuuieuvuilubleinotleidutu
sets.TleuoingBusincssdutuuiebused
ondomesticluwsundiegulutionsus
wellusudministiutiveiequiiements.
(Foiudetuiledexplunutionoltleuoing
Busincssmetlodology,see
www.doingbusiness.oig/metlodology)
InIormatlonsourcesIorthedata
Mostoltleindicutoisuiebusedonluws
undiegulutions.Inuddition,mostoltle
cost indicutois uie bucked by olciul lee
scledules.uoingBusincssiespondents
botl ll out wiitten suiveys und
piovideieleiencestotleielevuntluws,
iegulutionsundleescledules,uiding
dutucleckingundquulityussuiunce.
Foisomeindicutoisloiexumple,tle
indicutoisondeulingwitlconstiuction
peimits,enloicingcontiuctsund
closingubusinesspuitoltlecost
component(wleieleescledulesuie
lucking)undtletimecomponentuie
busedonuctuulpiucticeiutleitlun
tleluwontlebooks.Tlisintioduces
udegieeolsubjectivity.Tleuoing
Busincssuppioucllustleieloiebeen
towoikwitllegulpiuctitioneisoi
piolessionulswloieguluilyundeituke
tletiunsuctionsinvolved.Following
tlestunduidmetlodologiculuppioucl
loitimeundmotionstudies,uoing
Busincssbieuksdowneuclpiocessoi
tiunsuction,suclusstuitingundlegully
opeiutingubusiness,intosepuiutesteps
toensuieubetteiestimuteoltime.Tle
timeestimuteloieuclstepisgivenby
piuctitioneis witl signicunt und ioutine
expeiienceintletiunsuction.
Oveitlepusteigltyeuis,moie
tlun 11,000 piolessionuls in 183
economiesluveussistedinpioviding
tledututlutinloimtleuoingBusincss
indicutois.TleuoingBusincsswebsite
indicutestlenumbeioliespondents
loieucleconomyundeuclindicutoi.
Respondentsuiepiolessionulsoi
goveinment olciuls wlo ioutinely
udministeioiudviseontlelegulund
iegulutoiyiequiiementscoveiedin
eucluoingBusincsstopic.Becuuse
oltlelocusonlegulundiegulutoiy
uiiungements,mostoltleiespondents
uieluwyeis.Tlecieditinloimution
suivey is unsweied by olciuls ol tle
cieditiegistiyoibuieuu.Fieiglt
loiwuideis,uccountunts,uiclitectsund
otleipiolessionulsunsweitlesuiveys
ielutedtotiudinguciossboideis,tuxes
undconstiuctionpeimits.
TleuoingBusincssuppiouclto
dutucollectioncontiustswitltlut
ol enteipiise oi im suiveys, wlicl
cuptuieoltenone-timepeiceptionsund
expeiiencesolbusinesses.Acoipoiute
luwyei iegisteiing 1001S0 businesses
uyeuiwillbemoielumiliuiwitltle
piocesstlununentiepieneui,wlowill
iegisteiubusinessonlyonceoimuybe
twice.Abunkiuptcyjudgedeciding
dozensolcusesuyeuiwillluvemoie
insigltintobunkiuptcytlunucompuny
tlutmuyundeigotlepiocess.
DevelopmentoIthemethodology
Tlemetlodologyloiculculutingeucl
indicutoiistiunspuient,objectiveund
eusilyieplicuble.Leudingucudemics
colluboiuteintledevelopmentol
tleindicutois,ensuiingucudemic
iigoui.Eigltoltlebuckgioundpupeis
undeilyingtleindicutoisluvebeen
publisledinleudingeconomicjouinuls.
uoingBusincssusesusimpleuveiuging
uppiouclloiweigltingcomponent
indicutoisundculculutingiunkings.
Otleiuppiouclesweieexploied,
includingusingpiincipulcomponents
undunobseivedcomponents.Tleytuin
outtoyieldiesultsneuilyidenticulto
tloseolsimpleuveiuging.Tleninesets
ol indicutois piovide sulciently bioud
coveiugeuciosstopics.Tleieloie,tle
simpleuveiuginguppiouclisused.
uoingBusincssulsocontinuesto
benet liom discussions witl exteinul
stukeloldeis,includingpuiticipuntsin
tleInteinutionulTuxDiulogue,ontle
suiveyinstiumentundmetlodology.
Allclungesinmetlodologyuie
expluinedontleuoingBusincsswebsite.
Inuddition,dututimeseiiesloieucl
indicutoiundeconomyuieuvuilubleon
tle website, beginning witl tle ist yeui
tleindicutoioieconomywusincluded
intleiepoit.Topiovideucompuiuble
timeseiiesloiieseuicl,tledutusetis
buck-culculutedtoudjustloiclungesin
metlodologyundunyievisionsindutu
duetocoiiections.Tlewebsiteulso
mukesuvuilubleulloiiginuldutusets
usedloibuckgioundpupeis.
Inloimutionondutucoiiectionsis
piovidedontlewebsite.Atiunspuient
compluintpioceduieullowsunyone
toclullengetledutu.Ileiioisuie
conimed ultei u dutu veiicution
piocess, tley uie expeditiouslycoiiected.
6
http://www.doingbusiness.org/Subnational/.
7
Schneider (2005).
8
http://www.enterprisesurveys.org.
The Paying Taxes reforms
Summuiisedbytle
WoildBunkundIFC
Appendlx3:TlePuyingTuxesieloims
Key
Doing Business reform making it easier to pay taxes (as measured by the indicators)
Doing Business reform making it more difcult to pay taxes (as measured by the indicators)
TleseieloimsweieimplementedbetweenJune2009undMuy2010.
Albania
Albuniumudeiteusieiundlesscostly
loicompuniestopuytuxesbyumending
seveiulluws,ieducingsociulsecuiity
contiibutionsundintioducingelectionic
ling und puyment.
Azerbaijan
AievisionolAzeibuijunstuxcode
loweiedseveiultuxiutes,includingtle
piot tux iute, und simplied tle piocess
olpuyingcoipoiuteincometuxund
vulueuddedtux.
Belarus
Reductionsintletuinoveitux,sociul
secuiitycontiibutionsundtlebuseloi
piopeitytuxesulongwitlcontinued
elloits to encouiuge electionic ling
mudeiteusieiundlesscostlyloi
compuniesinBeluiustopuytuxes.
Bosnia and Herzegovina
Bosniu und Heizegovinu simplied its

lubouituxpiocesses,ieducedemployei
contiibutioniutesloisociulsecuiityund
ubolisleditspuyiolltux.
Brunei Darussalam
BiuneiDuiussulumieducedtle
coipoiuteincometuxiuteliom23.S%to
22%wlileulsointioducinguloweitux
iuteloismullbusinesses,iungingliom
S.S%to11%.
Bulgaria
Bulguiiuieducedemployeicontiibution
iutesloisociulsecuiity.
Burkina Faso
BuikinuFusoieducedtlestututoiy
coipoiuteincometuxiuteund
tlenumbeioltuxesloibusiness
undintioducedsimplei,uniloim
compliuncepioceduies.
Burundi
Buiundimudepuyingtuxessimpleiby
ieplucingtletiunsuctionstuxwitlu
vulueuddedtux.
Canada
CunuduluimonisedtleOntuiiound
ledeiultuxietuinsundieducedtle
coipoiuteundemployeetuxiutes.
Cape Verde
CupeVeideubolisledtlestumpduties
onsulesundcleques.
Chad
Cludincieusedtuxesonbusiness
tliouglclungestoitssociulsecuiity
contiibutioniutes.
China
Clinusnewcoipoiuteincometuxluw
unied tle tux iegimes loi domestic
und loieign enteipiises und cluiied
tleculculutionoltuxubleincomeloi
coipoiuteincometuxpuiposes.
Congo, Rep.
TleRepublicolCongoieducedits
coipoiuteincometuxiuteliom38%to
36%in2010.
Czech Republic
Tle Czecl Republic simplied its luboui
tuxpiocessesundieducedemployei
contiibutioniutesloisociulsecuiity.
Estonia
Estoniuincieusedtleunemployment
insuiuncecontiibutioniute.
Macedonia, FYR
FYRMucedoniuloweiedtuxcosts
loibusinessesbyiequiiingtlut
coipoiuteincometuxbepuidonlyon
distiibutedpiots.
Madagascar
Muduguscuicontinuedtoieduce
coipoiutetuxiutes.
Mauritius
Muuiitiusintioducedunewcoipoiute
sociuliesponsibilitytux.
Mexico
Mexicoincieusedtuxesoncompunies
byiuisingseveiultuxiutes,including
tlecoipoiuteincometuxundtleiute
oncusldeposits.Attlesumetime,tle
udministiutivebuidenluscontinued
todecieusewitlmoieoptionsloi
onlinepuymentundincieuseduseol
uccountingsoltwuie.
Moldova
Moldovuieducedemployeicontiibution
iutesloisociulsecuiity.
Montenegro
AnumendmenttoMontenegios
coipoiuteincometuxluwiemovedtle
obligutionloiudvuncepuymentsund
ubolisledtleconstiuctionlundcluige.
Netherlands
TleNetleilundsieducedtleliequency
ol ling und puying vulue udded tuxes
liommontllytoquuiteilyundullowed
smullentitiestousetleiiunnuul
uccountsustlebusisloicomputingtleii
coipoiuteincometux.
Hong Kong SAR, China
HongKongSAR(Clinu)ubolisledtle
lueltuxondiesel.
Hungary
Hunguiy simplied tuxes und tux buses.
Iceland
Icelundincieusedtlecoipoiute
incometuxiuteliom1S%to18%und
iuisedsociulsecuiityundpension
contiibutioniutes.
India
Indiuieducedtleudministiutive
buidenolpuyingtuxesbyubolisling
tle liinge benet tux und impioving
electionicpuyment.
Indonesia
Indonesiuieduceditscoipoiuteincome
tuxiute.
Jordan
Joidunubolisledceituintuxesundmude
it possible to le income und sules tux
ietuinselectionicully.
Kenya
Kenyuincieusedtleudministiutive
buidenolpuyingtuxesbyiequiiing
quuiteily ling ol puyioll tuxes.
Lao PDR
LuoPDRieplucedtlebusinesstuinovei
tuxwitlunewvulueuddedtux.
Lithuania
Litluuniuieducedcoipoiutetuxiutes.
Summary of
the paying taxes
reformsconrinucd
Nicaragua
Nicuiuguu incieused tuxes on ims by
iuisingsociulsecuiitycontiibutioniutes
undintioducingu10%witllolding
tuxontlegiossinteiestucciuedliom
deposits.Itulsoimpiovedelectionic
puymentoltuxestliouglbunktiunslei.
Niger
Nigeiieduceditscoipoiuteincome
tuxiute.
Panama
Punumuieducedtlecoipoiuteincome
tux iute, modied vuiious tuxes und
cieutedunewtuxcouitoluppeuls.
Portugal
Poitugulintioducedunewsociulsecuiity
codeundloweiedcoipoiutetuxiutes.
Puerto Rico
PueitoRicomudepuyingtuxesmoie
costlyloibusinessbyintioducingu
speciulsuituxolS%ontletuxliubility
inudditiontotlenoimulcoipoiute
incometux.
Romania
Romuniuintioducedtuxclunges,
including u new minimum tux on piot,
tlutmudepuyingtuxesmoiecostly
loicompunies.
So Tom and Principe
SoTomeundPiincipeieduced
tlecoipoiuteincometuxiutetou
stunduid2S%.
Seychelles
TleSeyclellesiemovedtletux-liee
tliesloldlimitundloweiedcoipoiute
incometuxiutes.
Sierra Leone
SieiiuLeoneieplucedsulesundseivice
tuxeswitlugoodsundseivicetux.
Slovenia
Sloveniuubolisleditspuyiolltuxund
ieduceditscoipoiuteincometuxiute.
Taiwan, China
Tuiwun(Clinu)ieducedtlecoipoiute
income tux iute und simplied tux ietuin
loims,iulesloiussessingcoipoiute
incometuxundtleculculutionolinteiim
tuxpuyments.
Tajikistan
Tujikistunloweieditscoipoiuteincome
tuxiute.
Thailand
Tluilundtempoiuiilyloweiedtuxeson
business by ieducing its specic business
tuxloi12montls.
Tonga
Tongu simplied tle puyment ol tuxes
byieplucingutwo-tieisystemwitl
u2S%coipoiuteincometuxiuteloi
botldomesticundloieigncompunies
undintioducingtuxincentiveswitlu
bioud-busedcupitulullowuncesystem
toieplucetuxloliduysundotlei
tuxconcessions.
Tunisia
Tunisiuintioducedtleuseolelectionic
systemsloipuymentolcoipoiuteincome
tuxundvulueuddedtux.
Ukraine
Ukiuineeusedtuxcompliunceby
intioducingundcontinuullyenluncing
un electionic ling system loi vulue
uddedtux.
United States
IntleUnitedStutestleintioduction
olunewtuxonpuyiollincieusedtuxes
oncompuniesopeiutingwitlintle
NewYoikCitymetiopolituncommutei
tiunspoitutiondistiict.
Venezuela, RB
RepublicuBolivuiiunudeVenezuelu
ubolisled tle tux on nunciul
tiunsuctions.
Zimbabwe
Zimbubweieducedtlecoipoiuteincome
tuxiuteliom30%to2S%,loweiedtle
cupitulguinstuxliom20%toS%und
simplied tle puyment ol coipoiute
incometuxbyullowingquuiteily
puymenttliouglcommeiciulbunks.
The data tables
Appendlx4:Tledututubles
Table1:Euseolpuyingtuxesiunkings 88
Table2:Tuxpuyments 91
Table3:Timetocomply 94
Table4:TotulTuxRute(TTR) 97
Table 1
Euseolpuying
tuxesiunkings
Rankings
Economy
Ease of
paying taxes
Tax
payments
Time to
comply
Total
Tax Rate
Afghanistan 53 15 118 72
Albania 149 142 146 92
Algeria 168 116 161 169
Angola 142 98 122 143
Antigua and Barbuda 132 167 79 97
Argentina 143 24 162 177
Armenia 159 156 169 94
Australia 48 35 22 127
Austria 104 80 59 148
Azerbaijan 103 60 128 95
Bahamas, The 50 60 5 121
Bahrain 14 87 3 9
Bangladesh 93 76 127 65
Belarus 183 181 178 173
Belgium 70 35 50 151
Belize 69 130 44 56
Benin 167 166 109 164
Bhutan 94 60 117 91
Bolivia 177 135 182 172
Bosnia and Herzegovina 127 158 158 22
Botswana 21 65 47 16
Brazil 152 33 183 168
Brunei Darussalam 22 49 41 39
Bulgaria 85 56 171 35
Burkina Faso 148 146 109 115
Burundi 141 102 83 178
Cambodia 57 129 61 20
Cameroon 169 142 172 133
Canada 10 15 34 37
Cape Verde 100 140 65 75
Central African Republic 182 163 166 179
Chad 179 163 177 161
Chile 46 24 131 26
China 114 9 154 158
Colombia 118 71 80 171
Comoros 96 71 19 180
Congo, Dem. Rep. 163 102 137 183
Congo, Rep. 180 172 170 162
Costa Rica 155 135 116 147
Cte dIvoire 153 175 109 111
Croatia 42 56 71 52
Cyprus 32 91 46 23
Czech Republic 128 40 167 132
Denmark 13 24 38 36
Djibouti 60 120 17 84
Dominica 67 127 27 74
Dominican Republic 76 24 134 93
Ecuador 81 15 172 67
Egypt, Arab Rep. 136 94 160 104
El Salvador 137 160 132 66
Equatorial Guinea 170 146 165 154
Eritrea 113 60 85 174
Estonia 30 9 14 134
Ethiopia 47 65 73 45
Fiji 77 109 56 86
Finland 65 15 99 113
France 55 9 36 163
Gabon 140 88 164 107
Gambia, The 176 156 150 182
Georgia 61 60 152 10
Germany 88 53 84 128
Table 1
Euseolpuying
tuxesiunkings
conrinucd
Rankings
Economy
Ease of
paying taxes
Tax
payments
Time to
comply
Total
Tax Rate
Ghana 78 109 90 53
Greece 74 33 90 125
Grenada 79 97 39 117
Guatemala 116 85 141 96
Guinea 173 167 157 145
Guinea-Bissau 133 146 80 119
Guyana 119 116 124 85
Haiti 97 135 53 87
Honduras 147 149 90 129
Hong Kong, China 3 2 12 24
Hungary 109 43 120 144
Iceland 35 98 39 32
India 164 167 104 157
Indonesia 130 158 107 77
Iran, Islamic Rep. 115 71 141 109
Iraq 54 42 130 34
Ireland 7 24 9 30
Israel 82 109 97 49
Italy 128 49 123 167
Jamaica 174 179 156 136
Japan 112 43 143 130
Jordan 29 88 20 46
Kazakhstan 39 24 115 38
Kenya 162 133 153 135
Kiribati 10 9 27 50
Korea, Rep. 49 43 101 40
Kosovo 41 109 56 13
Kuwait 9 49 25 11
Kyrgyz Republic 150 152 77 152
Lao PDR 116 116 147 59
Latvia 59 9 125 81
Lebanon 36 65 63 42
Lesotho 64 76 134 17
Liberia 84 102 52 108
Lithuania 44 35 62 83
Luxembourg 15 80 6 18
Macedonia, FYR 33 130 26 5
Madagascar 72 83 76 79
Malawi 25 65 51 27
Malaysia 23 40 43 58
Maldives 1 2 1 3
Mali 159 170 109 140
Marshall Islands 90 76 31 160
Mauritania 172 127 176 166
Mauritius 12 9 54 25
Mexico 107 7 155 138
Micronesia, Fed. Sts. 83 76 31 153
Moldova 106 152 95 44
Mongolia 66 140 67 21
Montenegro 139 180 148 31
Morocco 124 93 145 99
Mozambique 101 123 96 62
Namibia 99 123 149 4
Nepal 123 116 140 80
Netherlands 27 24 37 90
New Zealand 26 15 67 63
Nicaragua 158 175 87 156
Niger 144 133 109 122
Nigeria 134 120 180 51
Norway 18 5 16 98
Oman 8 43 7 19
Table 1
Euseolpuying
tuxesiunkings
conrinucd
Rankings
Economy
Ease of
paying taxes
Tax
payments
Time to
comply
Total
Tax Rate
Pakistan 145 149 168 48
Palau 89 65 31 170
Panama 175 173 163 137
Papua New Guinea 101 109 69 103
Paraguay 110 120 129 64
Peru 86 24 151 88
Philippines 124 149 70 118
Poland 121 94 136 102
Portugal 73 15 126 106
Puerto Rico 108 53 86 165
Qatar 2 2 3 6
Romania 151 182 87 114
Russian Federation 105 35 132 123
Rwanda 43 88 45 47
Samoa 68 123 90 15
So Tom and Principe 135 135 159 57
Saudi Arabia 6 43 11 8
Senegal 170 170 175 120
Serbia 138 177 121 60
Seychelles 38 53 9 110
Sierra Leone 159 94 144 181
Singapore 4 6 15 28
Slovak Republic 122 98 103 131
Slovenia 80 80 105 68
Solomon Islands 51 109 12 71
South Africa 24 24 75 43
Spain 71 15 72 150
Sri Lanka 166 173 102 159
St. Kitts and Nevis 98 85 49 142
St. Lucia 45 102 18 61
St. Vincent and the Grenadines 55 102 24 82
Sudan 94 135 63 70
Suriname 34 56 74 33
Swaziland 52 109 21 73
Sweden 39 1 30 146
Switzerland 16 65 8 41
Syrian Arab Republic 110 71 137 105
Taiwan, China 87 56 108 100
Tajikistan 165 163 90 175
Tanzania 120 152 60 116
Thailand 91 83 106 78
Timor-Leste 20 7 119 1
Togo 157 160 109 139
Tonga 31 71 58 29
Trinidad and Tobago 91 130 82 55
Tunisia 58 15 41 155
Turkey 75 49 89 112
Uganda 62 102 54 69
Ukraine 181 183 174 149
United Arab Emirates 5 43 2 7
United Kingdom 16 15 23 76
United States 62 35 66 124
Uruguay 155 160 137 101
Uzbekistan 154 142 78 176
Vanuatu 19 98 27 2
Venezuela, R.B. 178 178 179 141
Vietnam 124 102 181 54
West Bank and Gaza 28 91 48 14
Yemen, Rep. 146 142 100 126
Zambia 37 123 35 12
Zimbabwe 131 155 98 89
Table 2
Tuxpuyments
Number of payments Rank
Economy
Total tax
payments
Prot tax
payments
Labour tax
payments
Other taxes
payments
Tax
payments
rank
Afghanistan 8 1 0 7 15
Albania 44 13 12 19 142
Algeria 34 4 12 18 116
Angola 31 4 12 15 98
Antigua and Barbuda 56 13 24 19 167
Argentina 9 1 1 7 24
Armenia 50 13 12 25 156
Australia 11 1 4 6 35
Austria 22 1 4 17 80
Azerbaijan 18 1 12 5 60
Bahamas, The 18 1 12 5 60
Bahrain 25 0 24 1 87
Bangladesh 21 6 0 15 76
Belarus 82 18 24 40 181
Belgium 11 1 2 8 35
Belize 40 12 12 16 130
Benin 55 5 24 26 166
Bhutan 18 2 12 4 60
Bolivia 42 1 12 29 135
Bosnia and Herzegovina 51 12 12 27 158
Botswana 19 6 0 13 65
Brazil 10 2 2 6 33
Brunei Darussalam 15 1 12 2 49
Bulgaria 17 1 1 15 56
Burkina Faso 46 2 24 20 146
Burundi 32 1 16 15 102
Cambodia 39 12 12 15 129
Cameroon 44 13 12 19 142
Canada 8 1 3 4 15
Cape Verde 43 4 24 15 140
Central African Republic 54 4 24 26 163
Chad 54 12 24 18 163
Chile 9 1 1 7 24
China 7 2 1 4 9
Colombia 20 2 1 17 71
Comoros 20 2 0 18 71
Congo, Dem. Rep. 32 1 16 15 102
Congo, Rep. 61 5 37 19 172
Costa Rica 42 5 12 25 135
Cte dIvoire 64 3 24 37 175
Croatia 17 1 12 4 56
Cyprus 27 5 12 10 91
Czech Republic 12 1 2 9 40
Denmark 9 3 1 5 24
Djibouti 35 5 12 18 120
Dominica 38 5 12 21 127
Dominican Republic 9 1 4 4 24
Ecuador 8 2 1 5 15
Egypt, Arab Rep. 29 1 12 16 94
El Salvador 53 13 24 16 160
Equatorial Guinea 46 1 24 21 146
Eritrea 18 2 0 16 60
Estonia 7 1 0 6 9
Ethiopia 19 2 0 17 65
Fiji 33 4 14 15 109
Finland 8 1 3 4 15
France 7 1 2 4 9
Gabon 26 3 4 19 88
Gambia, The 50 6 25 19 156
Georgia 18 4 0 14 60
Germany 16 2 4 10 53
Table 2
Tuxpuyments
conrinucd
Economy
Total tax
payments
Prot tax
payments
Labour tax
payments
Other taxes
payments
Tax
payments
rank
Ghana 33 6 12 15 109
Greece 10 1 1 8 33
Grenada 30 1 12 17 97
Guatemala 24 1 12 11 85
Guinea 56 2 36 18 167
Guinea-Bissau 46 5 12 29 146
Guyana 34 6 12 16 116
Haiti 42 2 25 15 135
Honduras 47 5 13 29 149
Hong Kong, China 3 1 1 1 2
Hungary 14 4 4 6 43
Iceland 31 1 14 16 98
India 56 2 25 29 167
Indonesia 51 13 24 14 158
Iran, Islamic Rep. 20 1 12 7 71
Iraq 13 1 12 0 42
Ireland 9 1 1 7 24
Israel 33 2 12 19 109
Italy 15 2 1 12 49
Jamaica 72 4 48 20 179
Japan 14 2 2 10 43
Jordan 26 2 12 12 88
Kazakhstan 9 1 1 7 24
Kenya 41 5 14 22 133
Kiribati 7 5 2 0 9
Korea, Rep. 14 1 5 8 43
Kosovo 33 5 12 16 109
Kuwait 15 3 12 0 49
Kyrgyz Republic 48 5 12 31 152
Lao PDR 34 4 12 18 116
Latvia 7 1 1 5 9
Lebanon 19 1 12 6 65
Lesotho 21 5 0 16 76
Liberia 32 4 12 16 102
Lithuania 11 1 2 8 35
Luxembourg 22 2 12 8 80
Macedonia, FYR 40 12 12 16 130
Madagascar 23 1 8 14 83
Malawi 19 2 1 16 65
Malaysia 12 1 2 9 40
Maldives 3 0 0 3 2
Mali 59 4 36 19 170
Marshall Islands 21 0 16 5 76
Mauritania 38 3 13 22 127
Mauritius 7 1 1 5 9
Mexico 6 1 2 3 7
Micronesia, Fed. Sts. 21 0 4 17 76
Moldova 48 1 28 19 152
Mongolia 43 13 12 18 140
Montenegro 77 12 48 17 180
Morocco 28 1 12 15 93
Mozambique 37 7 12 18 123
Namibia 37 3 12 22 123
Nepal 34 4 12 18 116
Netherlands 9 1 1 7 24
New Zealand 8 1 2 5 15
Nicaragua 64 13 24 27 175
Niger 41 3 13 25 133
Nigeria 35 3 14 18 120
Norway 4 1 1 2 5
Oman 14 1 12 1 43
Table 2
Tuxpuyments
conrinucd
Economy
Total tax
payments
Prot tax
payments
Labour tax
payments
Other taxes
payments
Tax
payments
rank
Pakistan 47 5 25 17 149
Palau 19 4 12 3 65
Panama 62 5 24 33 173
Papua New Guinea 33 1 13 19 109
Paraguay 35 5 12 18 120
Peru 9 1 2 6 24
Philippines 47 1 36 10 149
Poland 29 12 1 16 94
Portugal 8 1 1 6 15
Puerto Rico 16 5 6 5 53
Qatar 3 0 1 2 2
Romania 113 4 84 25 182
Russian Federation 11 1 3 7 35
Rwanda 26 5 4 17 88
Samoa 37 5 24 8 123
So Tom and Principe 42 2 12 28 135
Saudi Arabia 14 1 12 1 43
Senegal 59 3 36 20 170
Serbia 66 12 12 42 177
Seychelles 16 1 12 3 53
Sierra Leone 29 1 12 16 94
Singapore 5 1 1 3 6
Slovak Republic 31 1 12 18 98
Slovenia 22 1 12 9 80
Solomon Islands 33 6 12 15 109
South Africa 9 2 3 4 24
Spain 8 1 1 6 15
Sri Lanka 62 5 24 33 173
St. Kitts and Nevis 24 4 12 8 85
St. Lucia 32 1 12 19 102
St. Vincent and the Grenadines 32 4 12 16 102
Sudan 42 2 12 28 135
Suriname 17 4 0 13 56
Swaziland 33 2 13 18 109
Sweden 2 1 0 1 1
Switzerland 19 2 7 10 65
Syrian Arab Republic 20 2 12 6 71
Taiwan, China 17 2 3 12 56
Tajikistan 54 12 12 30 163
Tanzania 48 5 24 19 152
Thailand 23 2 13 8 83
Timor-Leste 6 5 0 1 7
Togo 53 5 24 24 160
Tonga 20 1 0 19 71
Trinidad and Tobago 40 4 24 12 130
Tunisia 8 1 4 3 15
Turkey 15 1 1 13 49
Uganda 32 3 12 17 102
Ukraine 135 5 108 22 183
United Arab Emirates 14 0 12 2 43
United Kingdom 8 1 1 6 15
United States 11 2 4 5 35
Uruguay 53 1 24 28 160
Uzbekistan 44 8 12 24 142
Vanuatu 31 0 12 19 98
Venezuela, R.B. 70 14 28 28 178
Vietnam 32 6 12 14 102
West Bank and Gaza 27 14 0 13 91
Yemen, Rep. 44 1 24 19 142
Zambia 37 5 13 19 123
Zimbabwe 49 5 14 30 155
Table 3
Timetocomply
Number of hours Rank
Economy
Total tax
time
Corporate
income
tax time
Labour tax
time
Consumption
tax time Time rank
Afghanistan 275 77 120 78 118
Albania 360 120 96 144 146
Algeria 451 152 110 189 161
Angola 282 75 125 82 122
Antigua and Barbuda 207 23 136 48 79
Argentina 453 105 108 240 162
Armenia 581 146 233 202 169
Australia 109 37 18 54 22
Austria 170 49 54 67 59
Azerbaijan 306 64 101 141 128
Bahamas, The 58 10 48 0 5
Bahrain 36 0 36 0 3
Bangladesh 302 140 0 162 127
Belarus 798 494 112 192 178
Belgium 156 20 40 96 50
Belize 147 27 60 60 44
Benin 270 30 120 120 109
Bhutan 274 250 24 0 117
Bolivia 1080 120 480 480 182
Bosnia and Herzegovina 422 68 96 258 158
Botswana 152 40 40 72 47
Brazil 2600 736 490 1374 183
Brunei Darussalam 144 66 78 0 41
Bulgaria 616 40 288 288 171
Burkina Faso 270 30 120 120 109
Burundi 211 80 48 83 83
Cambodia 173 23 84 66 61
Cameroon 654 180 174 300 172
Canada 131 45 36 50 34
Cape Verde 186 35 85 66 65
Central African Republic 504 24 240 240 166
Chad 732 300 216 216 177
Chile 316 42 137 137 131
China 398 74 192 132 154
Colombia 208 40 102 66 80
Comoros 100 4 48 48 19
Congo, Dem. Rep. 336 116 124 96 137
Congo, Rep. 606 275 150 181 170
Costa Rica 272 18 126 128 116
Cte dIvoire 270 30 120 120 109
Croatia 196 60 96 40 71
Cyprus 149 29 80 40 46
Czech Republic 557 135 262 160 167
Denmark 135 25 70 40 38
Djibouti 90 30 36 24 17
Dominica 120 15 48 57 27
Dominican Republic 324 82 80 162 134
Ecuador 654 108 306 240 172
Egypt, Arab Rep. 433 69 189 175 160
El Salvador 320 128 96 96 132
Equatorial Guinea 492 145 160 187 165
Eritrea 216 24 96 96 85
Estonia 81 20 34 27 14
Ethiopia 198 150 24 24 73
Fiji 163 42 61 60 56
Finland 243 21 200 22 99
France 132 26 80 26 36
Gabon 488 137 131 220 164
Gambia, The 376 40 96 240 150
Georgia 387 140 67 180 152
Germany 215 30 142 43 84
Economy
Total tax
time
Corporate
income
tax time
Labour tax
time
Consumption
tax time Time rank
Ghana 224 40 88 96 90
Greece 224 88 48 88 90
Grenada 140 8 96 36 39
Guatemala 344 44 144 156 141
Guinea 416 32 192 192 157
Guinea-Bissau 208 160 24 24 80
Guyana 288 48 48 192 124
Haiti 160 40 72 48 53
Honduras 224 35 93 96 90
Hong Kong, China 80 50 30 0 12
Hungary 277 35 146 96 120
Iceland 140 40 60 40 39
India 258 46 96 116 104
Indonesia 266 88 97 81 107
Iran, Islamic Rep. 344 32 240 72 141
Iraq 312 24 288 0 130
Ireland 76 10 36 30 9
Israel 235 110 60 65 97
Italy 285 39 214 32 123
Jamaica 414 30 336 48 156
Japan 355 180 140 35 143
Jordan 101 5 60 36 20
Kazakhstan 271 105 74 92 115
Kenya 393 60 57 276 153
Kiribati 120 24 96 0 27
Korea, Rep. 250 120 80 50 101
Kosovo 163 32 41 90 56
Kuwait 118 48 70 0 25
Kyrgyz Republic 202 60 71 71 77
Lao PDR 362 138 42 182 147
Latvia 293 31 165 97 125
Lebanon 180 40 100 40 63
Lesotho 324 70 104 150 134
Liberia 158 57 59 42 52
Lithuania 175 32 85 58 62
Luxembourg 59 21 14 24 6
Macedonia, FYR 119 19 56 44 26
Madagascar 201 9 72 120 76
Malawi 157 67 30 60 51
Malaysia 145 28 87 30 43
Maldives 0 0 0 0 1
Mali 270 30 120 120 109
Marshall Islands 128 0 96 32 31
Mauritania 696 120 96 480 176
Mauritius 161 13 82 66 54
Mexico 404 157 73 174 155
Micronesia, Fed. Sts. 128 0 96 32 31
Moldova 228 80 88 60 95
Mongolia 192 57 63 72 67
Montenegro 372 43 136 193 148
Morocco 358 70 48 240 145
Mozambique 230 50 60 120 96
Namibia 375 41 46 288 149
Nepal 338 120 96 122 140
Netherlands 134 32 64 38 37
New Zealand 192 25 67 100 67
Nicaragua 222 74 76 72 87
Niger 270 30 120 120 109
Nigeria 938 398 378 162 180
Norway 87 24 15 48 16
Oman 62 50 12 0 7
Table 3
Timetocomply
conrinucd
Economy
Total tax
time
Corporate
income
tax time
Labour tax
time
Consumption
tax time Time rank
Pakistan 560 40 40 480 168
Palau 128 32 96 0 31
Panama 482 50 180 252 163
Papua New Guinea 194 153 8 33 69
Paraguay 311 35 132 144 129
Peru 380 43 181 156 151
Philippines 195 37 38 120 70
Poland 325 72 132 121 136
Portugal 298 40 162 96 126
Puerto Rico 218 80 60 78 86
Qatar 36 0 36 0 3
Romania 222 42 120 60 87
Russian Federation 320 160 96 64 132
Rwanda 148 22 48 78 45
Samoa 224 48 96 80 90
So Tom and Principe 424 40 192 192 159
Saudi Arabia 79 20 59 0 11
Senegal 666 120 96 450 175
Serbia 279 48 126 105 121
Seychelles 76 40 36 0 9
Sierra Leone 357 15 168 174 144
Singapore 84 34 10 40 15
Slovak Republic 257 43 100 114 103
Slovenia 260 90 96 74 105
Solomon Islands 80 8 30 42 12
South Africa 200 100 50 50 75
Spain 197 33 90 74 72
Sri Lanka 256 16 96 144 102
St. Kitts and Nevis 155 27 128 0 49
St. Lucia 92 11 51 30 18
St. Vincent and the Grenadines 111 14 52 45 24
Sudan 180 70 70 40 63
Suriname 199 48 24 127 74
Swaziland 104 8 48 48 21
Sweden 122 50 36 36 30
Switzerland 63 15 40 8 8
Syrian Arab Republic 336 300 36 0 137
Taiwan, China 269 209 27 33 108
Tajikistan 224 80 48 96 90
Tanzania 172 60 52 60 60
Thailand 264 160 48 56 106
Timor-Leste 276 132 144 0 119
Togo 270 30 120 120 109
Tonga 164 8 12 144 58
Trinidad and Tobago 210 45 75 90 82
Tunisia 144 64 30 50 41
Turkey 223 46 80 97 89
Uganda 161 35 66 60 54
Ukraine 657 112 364 181 174
United Arab Emirates 12 0 12 0 2
United Kingdom 110 35 45 30 23
United States 187 99 55 33 66
Uruguay 336 100 128 108 137
Uzbekistan 205 66 69 70 78
Vanuatu 120 0 24 96 27
Venezuela, R.B. 864 120 360 384 179
Vietnam 941 233 372 336 181
West Bank and Gaza 154 10 96 48 48
Yemen, Rep. 248 56 72 120 100
Zambia 132 48 24 60 35
Zimbabwe 242 78 96 68 98
Table 3
Timetocomply
conrinucd
Total Tax Rate Rank
Economy TTR
Prot tax
TTR
Labour tax
TTR
Other taxes
TTR
TTR
rank
Afghanistan 36.4% 0.0% 0.0% 36.4% 72
Albania 40.6% 8.5% 27.2% 4.9% 92
Algeria 72.0% 6.6% 29.7% 35.7% 169
Angola 53.2% 24.6% 9.0% 19.5% 143
Antigua and Barbuda 41.5% 26.0% 9.5% 6.0% 97
Argentina 108.2% 2.8% 29.4% 76.0% 177
Armenia 40.7% 16.6% 23.0% 1.1% 94
Australia 47.9% 25.9% 20.7% 1.3% 127
Austria 55.5% 15.7% 34.6% 5.2% 148
Azerbaijan 40.9% 13.8% 24.9% 2.2% 95
Bahamas, The 46.1% 0.0% 4.5% 41.6% 121
Bahrain 15.0% 0.0% 14.6% 0.4% 9
Bangladesh 35.0% 25.7% 0.0% 9.3% 65
Belarus 80.4% 22.0% 39.3% 19.1% 173
Belgium 57.0% 4.8% 50.4% 1.8% 151
Belize 33.2% 24.8% 7.0% 1.4% 56
Benin 66.0% 14.8% 27.3% 23.9% 164
Bhutan 40.6% 35.1% 1.1% 4.4% 91
Bolivia 80.0% 0.0% 15.5% 64.5% 172
Bosnia and Herzegovina 23.0% 5.3% 12.6% 5.1% 22
Botswana 19.5% 15.9% 0.0% 3.6% 16
Brazil 69.0% 21.4% 40.9% 6.7% 168
Brunei Darussalam 29.8% 24.2% 5.6% 0.0% 39
Bulgaria 29.0% 4.6% 20.5% 3.9% 35
Burkina Faso 44.9% 16.1% 22.6% 6.2% 115
Burundi 153.4% 19.4% 7.8% 126.2% 178
Cambodia 22.5% 18.9% 0.1% 3.5% 20
Cameroon 49.1% 29.9% 18.3% 0.9% 133
Canada 29.2% 9.8% 12.6% 6.8% 37
Cape Verde 37.1% 17.8% 18.5% 0.8% 75
Central African Republic 203.8% 176.8% 8.1% 18.9% 179
Chad 65.4% 31.3% 28.4% 5.7% 161
Chile 25.0% 18.0% 3.8% 3.2% 26
China 63.5% 6.0% 49.6% 7.9% 158
Colombia 78.7% 17.7% 33.9% 27.1% 171
Comoros 217.9% 31.4% 0.0% 186.5% 180
Congo, Dem. Rep. 339.7% 58.9% 7.9% 272.9% 183
Congo, Rep. 65.5% 0.0% 32.9% 32.6% 162
Costa Rica 55.0% 18.9% 29.5% 6.6% 147
Cte dIvoire 44.4% 8.8% 20.1% 15.5% 111
Croatia 32.5% 11.4% 19.5% 1.6% 52
Cyprus 23.2% 9.4% 11.6% 2.2% 23
Czech Republic 48.8% 7.4% 38.4% 3.0% 132
Denmark 29.2% 21.9% 3.6% 3.7% 36
Djibouti 38.7% 17.7% 17.7% 3.3% 84
Dominica 37.0% 25.9% 7.9% 3.2% 74
Dominican Republic 40.7% 20.6% 18.3% 1.8% 93
Ecuador 35.3% 18.4% 13.7% 3.2% 67
Egypt, Arab Rep. 42.6% 13.2% 25.8% 3.6% 104
El Salvador 35.0% 17.0% 17.2% 0.8% 66
Equatorial Guinea 59.5% 13.5% 25.4% 20.6% 154
Eritrea 84.5% 8.8% 0.0% 75.7% 174
Estonia 49.6% 8.0% 39.2% 2.4% 134
Ethiopia 31.1% 26.8% 0.0% 4.3% 45
Fiji 39.3% 28.9% 10.2% 0.2% 86
Finland 44.6% 15.9% 27.7% 1.0% 113
France 65.8% 8.2% 51.7% 5.9% 163
Gabon 43.5% 18.4% 22.8% 2.3% 107
Gambia, The 292.3% 41.4% 12.9% 238.0% 182
Georgia 15.3% 13.3% 0.0% 2.0% 10
Germany 48.2% 22.9% 22.0% 3.3% 128
Table 4
TotulTuxRute(TTR)
Total Tax Rate Rank
Economy TTR
Prot tax
TTR
Labour tax
TTR
Other taxes
TTR
TTR
rank
Ghana 32.7% 18.1% 14.1% 0.5% 53
Greece 47.2% 13.9% 31.7% 1.6% 125
Grenada 45.3% 27.6% 5.6% 12.1% 117
Guatemala 40.9% 25.9% 14.3% 0.7% 96
Guinea 54.6% 19.4% 24.5% 10.7% 145
Guinea-Bissau 45.9% 14.9% 24.8% 6.2% 119
Guyana 38.9% 26.8% 8.8% 3.3% 85
Haiti 40.1% 23.4% 12.4% 4.3% 87
Honduras 48.3% 26.7% 10.7% 10.9% 129
Hong Kong, China 24.1% 18.7% 5.3% 0.1% 24
Hungary 53.3% 16.7% 34.4% 2.2% 144
Iceland 26.8% 6.9% 14.9% 5.0% 32
India 63.3% 24.0% 18.2% 21.1% 157
Indonesia 37.3% 26.6% 10.6% 0.1% 77
Iran, Islamic Rep. 44.1% 17.8% 25.9% 0.4% 109
Iraq 28.4% 14.9% 13.5% 0.0% 34
Ireland 26.5% 11.9% 11.6% 3.0% 30
Israel 31.7% 23.8% 5.3% 2.6% 49
Italy 68.6% 22.8% 43.4% 2.4% 167
Jamaica 50.1% 28.6% 13.0% 8.5% 136
Japan 48.6% 27.9% 14.7% 6.0% 130
Jordan 31.2% 15.2% 12.4% 3.6% 46
Kazakhstan 29.6% 16.2% 11.5% 1.9% 38
Kenya 49.7% 33.1% 6.8% 9.8% 135
Kiribati 31.8% 23.3% 8.5% 0.0% 50
Korea, Rep. 29.8% 15.3% 12.9% 1.6% 40
Kosovo 16.5% 10.3% 5.6% 0.6% 13
Kuwait 15.5% 4.8% 10.7% 0.0% 11
Kyrgyz Republic 57.2% 8.9% 21.5% 26.8% 152
Lao PDR 33.7% 25.2% 5.6% 2.9% 59
Latvia 38.5% 6.5% 27.2% 4.8% 81
Lebanon 30.2% 6.1% 24.1% 0.0% 42
Lesotho 19.6% 16.4% 0.0% 3.2% 17
Liberia 43.7% 0.0% 5.4% 38.3% 108
Lithuania 38.7% 0.0% 35.1% 3.6% 83
Luxembourg 21.1% 4.1% 15.4% 1.6% 18
Macedonia, FYR 10.6% 6.2% 0.6% 3.8% 5
Madagascar 37.7% 15.8% 20.3% 1.6% 79
Malawi 25.1% 23.3% 1.1% 0.7% 27
Malaysia 33.7% 16.7% 15.6% 1.4% 58
Maldives 9.3% 0.0% 0.0% 9.3% 3
Mali 52.2% 12.9% 32.6% 6.7% 140
Marshall Islands 64.9% 0.0% 11.8% 53.1% 160
Mauritania 68.4% 44.2% 17.6% 6.6% 166
Mauritius 24.1% 11.8% 5.0% 7.3% 25
Mexico 50.5% 23.1% 26.1% 1.3% 138
Micronesia, Fed. Sts. 58.7% 0.0% 6.8% 51.9% 153
Moldova 30.9% 0.0% 30.2% 0.7% 44
Mongolia 23.0% 9.5% 12.5% 1.0% 21
Montenegro 26.6% 6.6% 17.9% 2.1% 31
Morocco 41.7% 18.1% 22.2% 1.4% 99
Mozambique 34.3% 27.7% 4.5% 2.1% 62
Namibia 9.6% 4.0% 1.0% 4.6% 4
Nepal 38.2% 16.2% 11.3% 10.7% 80
Netherlands 40.5% 20.9% 17.9% 1.7% 90
New Zealand 34.3% 30.4% 3.0% 0.9% 63
Nicaragua 63.2% 24.8% 19.2% 19.2% 156
Niger 46.5% 20.1% 19.6% 6.8% 122
Nigeria 32.2% 21.8% 9.7% 0.7% 51
Norway 41.6% 24.4% 15.9% 1.3% 98
Oman 21.6% 9.7% 11.8% 0.1% 19
Table 4
TotulTuxRute(TTR)
conrinucd
Total Tax Rate Rank
Economy TTR
Prot tax
TTR
Labour tax
TTR
Other taxes
TTR
TTR
rank
Pakistan 31.6% 14.3% 15.0% 2.3% 48
Palau 73.0% 66.0% 6.5% 0.5% 170
Panama 50.1% 17.0% 22.6% 10.5% 137
Papua New Guinea 42.3% 22.0% 11.7% 8.6% 103
Paraguay 35.0% 9.6% 18.6% 6.8% 64
Peru 40.2% 26.0% 11.0% 3.2% 88
Philippines 45.8% 21.3% 10.3% 14.2% 118
Poland 42.3% 17.7% 22.1% 2.5% 102
Portugal 43.3% 14.9% 26.8% 1.6% 106
Puerto Rico 67.7% 26.3% 14.4% 27.0% 165
Qatar 11.3% 0.0% 11.3% 0.0% 6
Romania 44.9% 10.4% 32.3% 2.2% 114
Russian Federation 46.5% 9.0% 31.8% 5.7% 123
Rwanda 31.3% 21.2% 5.7% 4.4% 47
Samoa 18.9% 11.9% 7.0% 0.0% 15
So Tom and Principe 33.3% 21.9% 6.8% 4.6% 57
Saudi Arabia 14.5% 2.1% 12.4% 0.0% 8
Senegal 46.0% 14.8% 24.1% 7.1% 120
Serbia 34.0% 11.6% 20.2% 2.2% 60
Seychelles 44.1% 20.8% 22.6% 0.7% 110
Sierra Leone 235.6% 0.0% 11.3% 224.3% 181
Singapore 25.4% 7.4% 14.9% 3.1% 28
Slovak Republic 48.7% 7.0% 39.6% 2.1% 131
Slovenia 35.4% 14.8% 18.2% 2.4% 68
Solomon Islands 36.4% 25.7% 8.5% 2.2% 71
South Africa 30.5% 24.3% 2.5% 3.7% 43
Spain 56.5% 20.9% 34.9% 0.7% 150
Sri Lanka 64.7% 27.4% 16.9% 20.4% 159
St. Kitts and Nevis 52.7% 32.7% 11.3% 8.7% 142
St. Lucia 34.0% 25.5% 5.6% 2.9% 61
St. Vincent and the Grenadines 38.7% 30.2% 5.1% 3.4% 82
Sudan 36.1% 13.8% 19.2% 3.1% 70
Suriname 27.9% 27.9% 0.0% 0.0% 33
Swaziland 36.8% 28.1% 4.0% 4.7% 73
Sweden 54.6% 16.4% 36.6% 1.6% 146
Switzerland 30.1% 8.9% 17.6% 3.6% 41
Syrian Arab Republic 42.9% 23.1% 19.3% 0.5% 105
Taiwan, China 41.9% 21.0% 16.7% 4.2% 100
Tajikistan 86.0% 17.7% 28.5% 39.8% 175
Tanzania 45.2% 19.9% 18.0% 7.3% 116
Thailand 37.4% 28.9% 5.7% 2.8% 78
Timor-Leste 0.2% 0.0% 0.0% 0.2% 1
Togo 50.8% 8.8% 28.3% 13.7% 139
Tonga 25.5% 24.3% 0.0% 1.2% 29
Trinidad and Tobago 33.1% 21.6% 5.8% 5.7% 55
Tunisia 62.8% 15.0% 25.2% 22.6% 155
Turkey 44.5% 17.0% 23.1% 4.4% 112
Uganda 35.7% 23.3% 11.3% 1.1% 69
Ukraine 55.5% 10.4% 43.3% 1.8% 149
United Arab Emirates 14.1% 0.0% 14.1% 0.0% 7
United Kingdom 37.3% 23.2% 10.8% 3.3% 76
United States 46.8% 27.6% 10.0% 9.2% 124
Uruguay 42.0% 23.5% 15.6% 2.9% 101
Uzbekistan 95.6% 1.6% 27.1% 66.9% 176
Vanuatu 8.4% 0.0% 4.5% 3.9% 2
Venezuela, R.B. 52.6% 10.0% 18.0% 24.6% 141
Vietnam 33.1% 12.5% 20.3% 0.3% 54
West Bank and Gaza 16.8% 16.2% 0.0% 0.6% 14
Yemen, Rep. 47.8% 35.1% 11.3% 1.4% 126
Zambia 16.1% 1.7% 10.4% 4.0% 12
Zimbabwe 40.3% 24.0% 6.2% 10.1% 89
Table 4
TotulTuxRute(TTR)
conrinucd
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
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accuracy of the information generated by the World
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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.
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