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After achieving its biggest improvement in 11 years for the simplicity and ease of doing business, the Philippines has also improved its global ranking for the easiness of paying taxes.
 

 

It was ranked 131st of 189 economies in a survey by the World Bank (WB) and International Finance Corporation (IFC) on the easiest countries in which to pay taxes, rising from 143rd of 185 countries in 2012. The UAE was the easiest country in which to pay taxes, followed by Qatar, Saudi Arabia, Hong Kong, and Singapore.

 

In its ‘Paying Taxe’ survey covering June 2012, to June 2013, WB and IFC, partnering with auditing firm PricewaterhouseCoopers, based the ease of paying taxes on levies and contributions imposed on medium-sized firms in a given year, taking into account three main indicators: number of payments, time given to comply, and total tax rate.

 

Economies worldwide adopt policies such as the upgrading of electronic payments, systems to reform tax regimes, raising tax revenues and encouraging growth. The report cited the Philippines for its tax reforms, particularly online tax filing and payments. Globally, businesses spend an average of 268 hours in complying with 26.7 tax payments and pay 43.1 per cent of their commercial profit for these, the survey noted.

 

The report added that compared to the UAE’s four tax payments, the Philippines requires 36 tax payments from businesses per year – one corporate income tax payment, 25 labour tax payments and social contributions, and 10 other forms of taxes. This is higher than the world average of 26.7. The number of tax payments in the Philippines improved from 47 payments in 2012. The number of hours businesses spend to prepare, file, and pay taxes in the Philippines is 193 hours – 42 hours to pay corporate income tax, 38 hours for labour taxes and social contributions, and 113 hours for consumption taxes.

 

In Asia, the shortest time to pay taxes is Hong Kong with 78 hours, followed by Singapore with 82 hours.