Tax Reform Remains on the Agenda of Governments Despite Economic Downturn-World Bank Report

November 20, 2009: Despite the economic downturn, government focus around the world has remained on tax reform, concludes a new report released today by the World Bank Group and PricewaterhouseCoopers LLP. The report, Paying Taxes, finds that 45 economies made it easier to pay taxes, almost 25 percent more than in the previous year.

For the third year in a row, Eastern Europe and Central Asia had the largest number of reforms, with 10 economies reforming.

The report measures the ease of paying taxes across 183 economies by assessing the administrative burden for companies to comply with tax regulations, and also by calculating companies’ total tax liability as a percentage of pre-tax profits. In the past five years, the report has recorded 171 reforms affecting taxes in 104 economies worldwide.

While 20 economies have reduced corporate income tax rates, 18 simplified the process of paying taxes. On average across all of the 183 economies covered in the report, the standard case study company measured has to make 31 tax payments and spend 286 hours on calculating and paying its taxes.



The results show that corporate income tax is just one of the taxes with which business must comply. On average, the company pays 9.5 different taxes and corporate income tax accounts for only 12 percent of payments, 26 percent of the time to comply, and 38 percent of the tax cost.

“Government efforts to streamline tax procedures and reduce time spent on compliance can make an important difference for small and medium enterprises, especially in difficult economic times,” said Penelope Brook, World Bank Group Director of the Global Indicators and Analysis department.

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