The Middle East has fewer and less complex tax laws in the world, according to Paying Taxes 2012, an annual report issued by PwC, the World Bank, and IFC.
Now in its sixth edition, the report compared tax systems across 183 countries from a business perspective, revealing that all six GCC states fall within the top 15 countries within the ranking. The UAE in particular was ranked 6th in 2012 down from 5th in 2011, as follows Qatar 2nd; UAE 6th; KSA 7th; Oman 8th; Kuwait 12th and Bahrain 13th.
On average there are almost half as many taxes levied in the Middle East, compared to the global average. Moreover, the time to complete tax obligations is significantly lower than the rest of the world. The findings further support the region’s growth prospects and its position on the global stage.
“The UAE has again been ranked in the top 10 for the ease of paying taxes,” Dean Rolfe Tax Partner at PwC, said.
“The Middle East has traditionally been, and continues to be, relatively straight forward when it comes to paying taxes due to the limited number of taxes that are currently levied. A key finding in this year’s report highlights that when governments continue to reform their tax systems they improve their overall rankings to become more internationally competitive. Such reforms might include the ability to file and pay taxes electronically.”
The Paying Taxes data is produced as part of the World Bank and IFC’s Doing Business study (www.doingbusiness.org). Data on business taxes is taken from a questionnaire sent by the World Bank to PwC offices and other third-party contributors around the world. The methodology used to analyse this data and assess the Total Tax Rate in each country is based largely on PwC’s Total Tax Contribution framework.
This year, the country rankings in the Paying Taxes report differ from those used by the World Bank in their Doing Business report. The Doing Business report has applied a threshold to the ranking for the Total Tax Rate to seek to mitigate the effect of low Total Tax Rates on the rankings.