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US sixty-ninth in ease of paying tax list

Friday 11 November 2011 – by Will Henley

Hong Kong, Singapore and Ireland are among the least burdensome international financial centres for paying taxes according to a new survey by PWC, the World Bank and International Finance Corporation.

Despite a reform drive announced by chancellor George Osborne, the UK has slipped two places to eighteenth position in this year’s study, which looks at the ease of paying tax over 183 economies. The UK was eleventh in 2006.

However, Britain still comes streets ahead of competitors such as the United States, which wallows in the rankings at number 69 and is behind France at number 55, although ahead of Germany at number 86.

Top of the poll, published on Friday, came Maldives, followed by Qatar, with Hong Kong in the third spot. Ireland was followed by United Arab Emirates, Saudia Arabia and Oman, marking out the Middle East as one of the least burdensome regions for tax.

Whereas Maldives’ total tax rate was just 9.3 per cent, with Qatar on 11.3 per cent, Hong Kong was at 23.0 per cent, ahead of Singapore at 27.1 per cent. Ireland’s total tax rate was 26.3 per cent, some way ahead of the UK at 37.3 per cent.

Comparatively, Switzerland was ranked at number 16 with a total tax rate of 30.1 per cent. The US total tax rate is lodged at 46.7 per cent, while Germany’s is 46.7 per cent, but France’s rate is at a staggering 65.7 per cent.

The ‘Paying Taxes 2012’ survey looks at both the administrative challenges as well as total taxes and mandatory contributions which a medium-sized company must pay in the given country.

It shows that, over the seven years the survey has been running, some 60 per cent of worldwide economies have taken steps to make it easier to pay taxes through a total of 244 reforms. The total tax rate has fallen by 8.5 per cent since 2006 – equivalent to 1 per cent every year.

The time to comply with taxes has meanwhile declined over that time by over a day per year – 54 hours.

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