Paying Taxes throughout the world

The World Bank and PwC compare relative national performance

Paying Taxes 2009 - the global picture

For the third year in succession the World Bank and PwC have compared, and contrasted, how difficult it is to comply with the tax systems of the world.

In the 2009 report this has involved181 different countries. See Paying Taxes 2009 – the global picture.

More details about the report are available from the PwC website

Doing Business report

The collaboration with PwC has grown out of the World Bank annual reviews of the difficultly of doing business around the world for which 2009 is the sixth such report.

Tax is an element of this Doing Business report and a copy of the 2009 report can be bought from the World Bank website

Tax Burden

The report suggests that, on average, corporate income tax accounts for only 13 percent of tax payments, 26 percent of compliance time, and 37 percent of the total tax rate (tax cost to the case study company).

Employment taxes account for 34 percent of the total tax rate, taking into account only amounts borne by the employer. Employment taxes are particularly prevalent in the European Union and account for 65 percent of the total tax rate for the case study company in the region.

On average, 36 percent of the overall time to comply with tax systems and 48 percent of the number of tax payments are spent on consumption taxes.

The impact of Regulation

ICAEW published a report in September 2008 on the economic literature regarding the impact of regulation and there is increasing evidence that as far as regulation is concerned ‘less is more’.

The previous idea that regulation would overcome market failures clearly retains some truth but if economies are to grow and prosper then they need less, rather than more, regulation.

The World Bank latest report states that ‘research generally finds that countries with burdensome regulations have larger informal sectors, higher unemployment rates and slower economic growth’.

18 November 2008