By Shane McGinley
All the GCC countries made the top 14 out of 183 countries surveyed for tax costs and efficiency
Qatar is the second easiest country in the world for paying taxes, with five of the top ten rankings in a new list coming from the Gulf, a new study revealed on Tuesday.
The ‘Paying Taxes 2011’ annual report, compiled by PricewaterhouseCoopers (PwC), the World Bank, and International Finance Corporation (IFC), measures the efficiency and cost of taxes in 183 different countries around the world.
For the second year running, Qatar came second in the rankings, with all six GCC countries ranking in the top 14.
While Dean Rolfe, Middle East tax leader at PwC, said “paying taxes in the Middle East has traditionally been, and continues to be, relatively straight forward,” he said the light tax burden in the region was unlikely to continue indefinitely.
"As governments increasingly need to source revenue to support economic diversification, tax will increasingly be seen as a suitable and effective solution to fund governments’ financial needs,” he warned.
Fouad Douglas, country senior partner Kuwait, echoed this sentiment saying: “It is interesting to note that governments are continuing to introduce new taxes in order to diversify their reliance on one source of taxation.”
In September, Philippe Dauba Pantanacce, senior economist at Standard Chartered said: "More, smaller, indirect taxes could be a way forward, even if they could not possibly translate into significant revenue sources for the government."
The report found that companies in the Middle East only have to pay around half the number of taxes as the global average and the time taken to complete tax returns is therefore significantly lower than the worldwide average.
Across the report, the study found that the average time taken to compile tax refunds has declined by a week since 2006 and the overall cost of taxes has fallen by five percent. In over 90 countries, nearly half, the tax burden on companies’ profits has fallen since 2006.
While Qatar ranked second, the UAE was fifth, Saudi Arabia sixth, Oman eighth, Kuwait ninth and Bahrain fourteenth.
Topping the ranking overall was the Maldives, making up the rest of the top ten was Hong King (3), Singapore (4), Ireland (7) and Canada and Kiribati on joint tenth.
The UK was sixteenth and the US 62nd, while the bottom five were Belarus (183), Central Africa Republic (182), Ukraine (181), Congo (180) and Chad (179).