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PwC: Tax compliance gets easier for companies, but new data highlights post - filing challenges

JAKARTA, Indonesia, Nov. 16, 2016 (GLOBE NEWSWIRE) -- Economies around the
world continue to make progress in simplifying and reducing the burden of tax
compliance on businesses, says the latest edition of Paying Taxes 2017
, a report by The World Bank Group and PwC.

Released today, the report finds that the Total Tax Rate decreased by 0.1
percentage points to 40.6 percent; time to comply declined by 8 hours to 251
hours; and the number of payments by 0.8 to 25 payments.

In an expanded analysis this year, the report finds that for some economies,
post-filing processes for value-added tax (VAT) and corporate income tax
(CIT) returns could be amongst the most challenging and lengthy processes for
businesses to comply with. In some cases, the length of the processes can
create cash flow and administrative delays for companies of more than a year.

The Paying Taxes
report examines the ease of paying taxes in 190 economies. The report models
business taxation in each economy using a medium-sized domestic case study

The reduction in the global average for time to comply of 8 hours is higher
than in recent years reflecting ongoing improvements in electronic tax
systems, and in particular as a result of reforms implemented in Brazil.
Similarly, the fall in the payments sub-indicator is largely due to the
introduction and use of electronic filing and payment systems, which was the
most common feature of tax reform in the past year. The small decrease in the
Total Tax Rate results from 44 economies increasing taxes while 38 recorded a
reduction. It also represents a combination of a decrease in other taxes
offset by small increases in both profit and labour taxes.

Globally, the most common feature of tax reforms in the past year was the
introduction or enhancement of electronic systems for filing and paying
taxes. Twenty-six economies implemented such changes. Jamaica was the top
reformer, reducing the number of payments by 26 to 11.

The new additional research finds the interactions which a company has with
tax authorities after a tax return has been filed can be some of the most
challenging. The processes vary significantly from one jurisdiction to

The report finds that 162 economies have a VAT system, with a VAT refund
available to the case study company in 93 economies. A fast and efficient
process can be critical to ensure that a company does not face cash flow
difficulties. For economies with a VAT refund system, on average it takes
just over 14 hours to make the VAT refund claim, but it then has to wait over
5 months (almost 22 weeks) to receive the refund.

The analysis shows it typically takes less time to comply with a VAT refund in
high income economies (almost 8 hours) than in low income economies (almost
27 hours). A VAT refund triggers an audit in 70% of economies, of which over
half (58%) will go through a comprehensive audit.

The study also shows that 180 economies in the study levied corporate income
tax in 2015. A voluntary correction to a corporate income tax return is
likely to lead to a tax audit in 74 of these. On average, it takes the case
study company almost 17 hours to correct the error in the CIT return. If the
tax authority requires an audit, it will take just over 17 weeks to finalise.
Examining the difference between low and high income countries, the study
finds that in low income economies it can take more than twice as long to
comply with procedures to correct CIT errors, and that low income countries
are twice as likely to conduct an audit.

Augusto Lopez-Claros, Director, Global Indicators Group, Development
Economics, World Bank Group said:

"Until now there has been little information around the cost of post-filing
procedures. The new post-filing index has shown that there are considerable
variations around the world in how tax authorities approach VAT refunds and
corporate income tax audits. We hope that the new data will allow governments
to better understand the impact that these procedures have on businesses and
will help encourage them to reform and enhance them to make it easier for
companies to do business."

Andrew Packman, leader for Tax Transparency and Total Tax Contribution at PwC

"While we recognise the pressures on governments to raise tax revenues to fund
public spending, Paying Taxes
has shown that in many economies, governments and tax authorities can make it
easier for companies to pay their taxes and this includes the ability to
claim a VAT refund or deal with a corporate income tax audit. More efficient
tax systems are good for businesses which in turn helps to promote economic
growth and investment."


1 Paying Taxes 2017 measures all mandatory taxes and contributions that a
medium-size company must pay in a given year as well as measuring the
administrative burden of filing and paying taxes and complying with
post-filing processes. Taxes and contributions measured include profit or
corporate income tax, social contributions and labour taxes paid by the
employer, property taxes, property transfer taxes, dividend tax, capital
gains tax, financial transactions tax, waste collection taxes, vehicle and
road taxes, and other small taxes or fees. For more information about the
Paying Taxes study, visit:
2 For the first time, this year's Paying Taxes study has been extended to
look at the processes that take place after a tax return has been filed.
The new post-filing index measures two processes that might take place
after filing; claiming a value added tax (VAT) or goods services tax (GST)
refund, and correcting an error on a corporate income tax (CIT) return
including going through an audit when applicable. For more information on
Paying Taxes visit
3 Paying Taxes builds on the World Bank Group's Doing Business reports'
chapter on Paying Taxes. For more information on the Doing Business report
series, visit:

About the World Bank Group

The World Bank Group plays a key role in the global effort to end extreme
poverty and boost shared prosperity. It consists of five institutions: the
World Bank, including the International Bank for Reconstruction and
Development (IBRD) and the International Development Association (IDA); the
International Finance Corporation (IFC); the Multilateral Investment
Guarantee Agency (MIGA); and the International Centre for Settlement of
Investment Disputes (ICSID). Working together in more than 100 countries,
these institutions provide financing, advice, and other solutions that enable
countries to address the most urgent challenges of development. For more
information, please visit,, and

About PwC

At PwC, our purpose is to build trust in society and solve important problems.
We're a network of firms in 157 countries with more than 223,000 people who
are committed to delivering quality in assurance, advisory and tax services.
Find out more and tell us what matters to you by visiting us at

PwC refers to the PwC network and/or one or more of its member firms, each of
which is a separate legal entity. Please see for
further details.

© 2016 PwC. All rights reserved

World Bank Group
Indira Chand
Phone: +1 202 458 0434

Rowena Mearley
Tel: +1 646 313 - 0937 / + 1 347 501 0931

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: PwC via Globenewswire

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