Paying Taxes Becoming Easier

November 23, 2012 International Tax Cooperation

TaxWASHINGTON D.C. – Governments around the world are boosting economic growth and improving tax compliance by making it easier for businesses to pay their taxes.

On November 22nd the World Bank released its annual Paying Taxes report for the 12 months ending June 2012, showing that governments around the world have continued to make extensive efforts to improve tax compliance amongst businesses by upgrading the national tax filing and payment systems.

The report examined the effect that tax policies have on the tax filing and compliance requirements faced by businesses operating in 185 different countries of the world, finding that compared to last year businesses now spend on 24 hours less preparing their taxes and are required to make 2 less tax payments per year.

According to the World Bank, over the 12 months 31 countries launched new online tax filing and payment facilities in an effort to enhance tax compliance and to reduce administration costs business and tax authorities.

The new filing systems directly led to a reduction in tax filing obligations, with medium sized businesses across the world now making an average of 27.2 tax payments per year and spending 267 hours to comply with their tax filing obligations.

The report also showed that simplifying  tax compliance has a strong positive effect on economic growth, and countries which attempted to ease the tax filing for businesses seeing significant improvements in their economic growth.

Commenting on the findings and explaining the importance of having easy procedures for filing taxes, one of the authors Andrew Packman said that “…governments seeking to create a more business-friendly tax climate need to focus not only on rates, but also on minimising the time and effort needed to comply.”

Photo by 401(K) 2012