DOHA: Paying taxes has become easier over the past year for medium-sized companies around the world. Qatar and UAE share an equal first place in the overall tax ranking, according to the latest report from the World Bank Group and PwC.
The two fast growing Gulf states, with a Total Tax Rate of 11.3 percent, 41 hours and 4 payments for Qatar; and a Total Tax Rate of 14.8 percent, 12 hours and 4 payments for the UAE occupying the top position. The time it takes an average company to meet its tax obligations dropped by four hours last year, according to the Paying Taxes 2015 study.
The report also revealed that the total amount the average company paid in taxes and the number of payments it made also declined in the past year. This is a trend seen every year over the ten year period covered by the publication.
According to the study, the Middle East continues to be the least demanding tax framework, with an average Total Tax Rate of 24 percent, 16.8 average number of payments and an average time to comply of 160 hours.
Overall ranking for Middle East countries in the global top 50 ranking are: Qatar and the UAE (1st), Saudi Arabia (3rd), Bahrain (8th), Oman (10th), Kuwait (11th), Lebanon (40th) and Jordan(45th)
Commenting on the report Dean Kern, Partner, PwC’s Middle East Markets, Tax and Legal Services Leader, said: “The Paying Taxes report helps inform the discussion around tax reform, a topic which is very relevant for governments in the region who need to respond to megatrends impacting us; such as rapid urbanisation, demographic changes in addition to achieving sustainable government fiscal positions.”
Commenting on Qatar’s move to the number one position Neil O’Brien, Tax Leader in PwC Qatar, noted that this aligns with the Government strategy and the policies they have implemented in making tax compliance easier for business. Adding the recent electronic filing initiative is again a further demonstration of the continuing programme of improvement and modernisation that the government of Qatar is committed to in further improving its interaction with business
“As we have seen with the recent and substantial tax reforms in different countries in the region, governments in the Middle East are very much engaged in deliberations concerning tax reform, not just in terms of fiscal balances, but also with broader policy objectives such as encouraging economic growth,” said Jeanine Daou, Partner and Middle East Leader for Indirect Taxes and Fiscal Policy. He added: “It’s clear per the findings of the report that the Middle East tax environment remains the least demanding, however it also highlights an important area that the region needs to work hard on, which is improving the use of electronic filing and payment mechanisms.”
Only 15 percent of the economies in the Middle East region have implemented electronic systems for filing and payment of taxes for at least one type of tax that are used by the majority of companies. This is second lowest result across all the regions.
The Peninsula
