SINGAPORE has been ranked fifth in the world in terms of being one of the easiest places in which to pay taxes.
The Republic maintained the same ranking as last year in the latest survey of 183 economies by the World Bank Group and PricewaterhouseCoopers (PwC).
The top four economies were the Maldives, Qatar, Hong Kong and the United Arab Emirates.
The report ‘Paying Taxes’ said despite the economic downturn, governments have generally remained focused on tax reform.
It found that 45 economies made it easier to pay taxes, almost a quarter more places than in the previous year.
The top reforming economy was Timor Leste, which 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 showing evidence of reforms.
‘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 Ms Penelope Brook, World Bank Group director of the global indicators and analysis department.
The report looks at how easy it is to pay 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.
For Singapore, the report noted that it was during the 1990s, when the Asian financial crisis struck, that the Republic bit the bullet and undertook reforms to combat the economic downturn.
Singapore lowered business costs through a series of tax cuts, rebates and exemptions introduced over the course of the crisis.
The report found that, across the economies surveyed, on average, a company pays 9.5 different taxes, makes 31 tax payments and spends 286 hours on calculating and paying its taxes.
‘The global recession has meant falling tax revenues and difficult tax policy choices,’ said Ms Paula Eastwood, who heads the corporate tax division at PwC in Singapore.
‘The challenge is ensuring sufficient public revenues for the future while incentivising investment and economic growth.’
Source: Straits Times, 24 Nov 2009
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