Paying Taxes 2015

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Paying Taxes 2015: The global picture

The changing face of tax compliance in 189economies worldwide

During 2014 there has been anincreasing focus on the perception thatthe world’s tax systems are no longerfit for purpose

Tax systems around the worldneed to be updated to meetmodern needs

The Paying Taxes study provides information to help inform thediscussion around tax reform

Now in its 9th year, Paying Taxes remains a unique study from PwC andthe World Bank group…

… comparing tax regimes in 189 economies around the world

How does your economy compare with others around the world? Findout by using our unique Paying Taxes modeller atwww.pwc.com/payingtaxesmodeller

2013

makes 25.9 tax payments per year

spends 264 hours to comply with its taxes

and has a tax cost of 40.9% of its commercial profit

On average, a medium-size domestic company

379

Reforms continue around the world

379 reformshave beenrecordedsince 2004

105 of these arerelated to electronicfiling and payment

105

43%

The compliance burden has been steadily easing since 2004with the growing use of electronic systems for filing andpayment…

… 43% of economies now haveelectronic filing and payment systems

which are used by the majority of companies

Corporate income tax is only part of the burden.

Taxes on profit are only…

12% of tax

payments…

27% of time spent on

tax compliance, and

40% of

the tax cost

Central Asia andEastern Europecontinues to be thefastest reformingregion. Africacontinues to improvebut reform is veryslow in South America

Labour taxes and mandatory contributions, account foran increasing share of the global Total Tax Rate havingrisen from

32%2004

40%2013

32% in 2004to almost 40% in 2013

…but consumption taxestake the longest timehours

99

Total Tax Rate

Since 2004 the global average TotalTax Rate has fallen by 11.2percentage points

Its rate of decline was fastestduring the global financial crisisperiod (2008–2010)

Total Tax Rate

56 economiesincreased their rate 56

whilst 47 reduced itin 2013

47

81% of governments publish information on taxrevenues but only 2/3rds of these keep the dataup-to-date

70% of contributors believe that a key aim ofgovernment policy is to increase tax revenues, but60% think that governments also have an eye onusing the tax system to encourage investment

Additional insights and views from PwCcontributors around the world

Interest in the tax agenda by the media and by civilsociety organisations is highest in North Americaand Europe

37% of economies find the post-filing processdifficult. On average these economies also spendmore time on pre-filing compliance

Additional insights and views from PwCcontributors around the world

In 181 economies thecase study company payscorporate income tax

187 economies levylabour taxes while…

170 economies nowhave consumption taxes

Central Asia & Eastern Europecontinues to be the fastest overallreformer with large falls for all the sub-indicators

Africa no longer has the highest tax rate

The highest averagetax cost is nowSouth America

55.4%

the lowest continuesto be in theMiddle East

24.0%

The biggest reduction in theTotal Tax Rate is in Africa

4.0percentage points

Electronic filing and payment provides thelargest opportunities for the region

South America has the most timeconsuming tax system

The lowest is in the Middle East

hours

620

hours

160

The largest fall in the time tocomply is in Central Asia &Eastern Europe hours

11

The most tax payments aremade in Africa 36.2Followed by Central America& the Caribbean 33.8The fewest are made in theNorth America 8.2

The largest fall in tax payments is inCentral Asia & Eastern Europe

6.5

The Middle East has the leastdemanding tax system, althoughelectronic filing and payment isstill a challenge

In Asia Pacific and Central Asia &Eastern Europe all three sub-indicators are also below theworld average

How does your economy compare with othersaround the world? Find out by using our uniquePaying Taxes modeller

available atwww.pwc.com/payingtaxesmodeller