Almaty, 6 December 2010 -- Nearly 60 percent of the world's economies have made significant business regulatory changes to ease paying taxes, despite the impact of the downturn and the sluggish global recovery, according to Paying Taxes 2011, a new report launched today by PwC, the World Bank, and IFC.
The report, which looks at 183 economies, finds that in the past year, 40 economies have made it easier to pay taxes, with Tunisia improving the most. The region with the biggest positive change was Central Asia and Eastern Europe where the Total Tax Rate dropped by 3.1%, the time to comply by 16 hours, and the number of payments by five.
Kazakhstan is ranked 39th in the world in terms of ease of paying taxes, which makes it the top-ranked country not only in Central Asia, but also in the CIS. Other countries of Central Asia: Kyrgyz Republic (150), Tajikistan (165) and Uzbekistan (154) rank lower in list. Russia is 105th, and China is number 114 in the global ease of paying taxes ranking.
"Kazakhstan continues to improve and simplify its tax system for small and medium enterprises. Keeping tax rates at a reasonable level can be important for encouraging the development of the private sector and formalization of businesses in the country." – said Munawer Sultan Khwaja, Senior Public Sector Specialist, World Bank.
The Paying Taxes 2011 report measures the ease of paying taxes by assessing the administrative burden for companies to comply with tax regulations, and by calculating companies' total tax liability as a percentage of pre-tax profits. According to the study, the typical company measured pays nearly half of its commercial profit in taxes, spends seven weeks dealing with its tax affairs and makes a tax payment every 12 days.
" The significant improvement of the tax system which allowed Kazakhstan to hold 39th place compared to 52nd from the last year ranking was accomplished due to positive fiscal reforms implemented in 2009 within the integrated efforts to achieve top 50 most competitive nation status. Kazakhstan has a potential of further improvements in the future which would be directly related with administrative reforms. “– said Richard Bregonje, PwC Partner at the presentation of Paying Taxes Report.
The study shows that paying taxes is easiest for business in high-income economies that have the lowest tax cost and the lowest administrative burden. These economies tend to have more mature tax systems, a lighter administrative touch, and greater use of the electronic interface with tax authorities.
About Paying Taxes 2011
The Paying Taxes study was carried out by PricewaterhouseCoopers and the World Bank Group as part of the World Bank Group’s Doing Business 2011 report. The methodology applied to calculate the total tax rate for each country uses the broad principles from the PricewaterhouseCoopers Total Tax Contribution Framework and looks across all taxes that businesses pay. The total tax rate indicator measures the amount of all taxes borne by the business in the second year of operation, expressed as a percentage of commercial profits.
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. Please visit www.pwc.com/kz for more information.
The World Bank’s overall mission in Kazakhstan is to help the Government in achieving diversified and sustainable economic growth and improving the living standards of population. To date, the Bank has provided 36 loans to Kazakhstan for the amount of more than US$ 5.2 billion since July 1992.
For more information about Paying Taxes, visit www.pwc.com/payingtaxes
For more information about the Doing Business report series, visit www.doingbusiness.org
