ISLAMABAD: A unique study from the World Bank measuring the difficulty faced by of paying tax ranks Pakistan at 145 position, out of 183 economies surveyed, covering both the cost of taxes and the administrative burden of tax compliance.
Paying Taxes 2011 study finds that paying taxes is getting easier despite economic downturn. It says 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.
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 study shows that paying taxes is easiest for business in high-income economies that have the lowest tax cost and the lowest administrative burden.
Pakistan’s ranks 149 in the number of tax payments, 168 in time to comply and 48 in total tax rate ranking. South Asian neighbour India ranks 164 in the easy of paying taxes, 167 for number of tax payments, 104 in time to comply and 157 in the total tax ranking. Bangladesh fairs well with overall 93 position, 76 in number of taxes, 127 in time to comply and 65 in total tax ranking.
Director of the Global Indicators and Analysis World Bank Neil Gregory said in a statement that the governments have continued to improve and simplify their tax systems for local firms and were seeing positive results. Best practices such as having one tax per tax base and the use of technology can simplify the compliance burden faced by firms.
The 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.
