It’s Easier to Pay Taxes Amid Economic Crisis – PwC Finds
Paying Taxes 2011, a new report disclosed by the PwC, the World Bank, and IFC, shows that about 60 percent of the economies in the world have applied adjustments in regulating their businesses to ease the way taxes are paid in spite of the global financial meltdown.
The findings covered 183 countries and found out that over the years, Tunisia has shown the most improvement among the 40 economies that have made changes to make paying taxes more easy. In the 2006 and 2011 studies, economies have managed to shorten the time needed to comply by just a week, cut the cost of tax by 5 percent, and reduced the number of payments by almost four.
Since 2006, a total of 90 economies have managed to drop corporate profits taxes.
Neil Gregory, Director of the Global Indicators and Analysis department at the World Bank Group, addressed the positive results of the unending improvement and simplification of the local firms’ tax systems.
“Best practices such as having one tax per tax base and the use of technology can simplify the compliance burden faced by firms,” Gregory said.
The reports assessed how companies dealt with tax regulations and calculated their total tax liability over pre-tax profits. The findings revealed that a typical company’s commercial profit is deducted by almost 50 percent worth of taxes. These companies are said to be spending seven weeks for their tax transactions and are paying taxes every 12 days.
Susan Symons, Total Tax Contribution Leader at PwC UK, attributed the decline in the taxes of company profits to the reduction of corporate tax rates made by the government to “encourage business investment and stimulate growth.”
Transactions in economies with high income and low cost on tax have shown the least burden in paying taxes. The report of PwC and two others noted that the economies studied have shown “mature tax systems, a lighter administrative touch, and greater use of the electronic interface with tax authorities.”