Belarus Ranks at Bottom in Ease of Paying Taxes

Belarus has the most difficult process of paying taxes in the world, suggests a report released by the World Bank last week.

In the report, titled Paying Taxes 2010, the World Bank and Price WaterhouseCoopers ranked the country at the bottom in terms of ease of paying taxes among 183 countries.

The report said that it takes 107 transactions, 900 hours and 99.7 percent of commercial profits to comply with business taxes in Belarus annually.

Maldives ranked first in the survey followed by Qatar, China/Hong Kong, the United Arab Emirates, Singapore, Ireland, Saudi Arabia, Oman, New Zealand and Kiribati.

At the bottom of the list were Uzbekistan, the Central African Republic, Congo, Ukraine and Venezuela, along with Belarus.

The report measures the ease of paying taxes 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.

According to the survey, this year’s top reformer, Timor-Leste, introduced a new tax law, streamlined the business tax regime and simplified tax administration.

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

"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, director of the World Bank Group’s Global Indicators and Analysis department. "This year’s top reformer reduced compliance time by over 50 percent by rationalizing tax regulations, simplifying computation rules, and reducing payments."

While 20 economies have reduced corporate income tax rates, 18 simplified the process of paying taxes. On average across all of the 183 economies, 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.