By Andy Sambidge
New report by World Bank and PwC also ranks Saudi Arabia, Bahrain and Oman in global top 10
The Middle East continues to be the least demanding tax framework in the world, with an average total tax rate of 24 percent, 16.8 average number of payments and an average time to comply of 160 hours, according to a new report published by the World Bank and PwC.
The study showed that Qatar and the UAE share an equal first place in the overall tax ranking, 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.
Saudi Arabia (3rd), Bahrain (8th), Oman (10th) and Kuwait (11th) were also ranked prominently in the global list of 50 countries surveyed.
Commenting on Qatar's move to the number one position, Neil O'Brien, tax leader in PwC Qatar, said that this aligns with the Government strategy and the policies they have implemented in making tax compliance easier for business.
Jeanine Daou, partner and Middle East leader for indirect taxes and fiscal policy, added: "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.
"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.
Globally, the report said paying taxes has become easier over the past year for medium-sized companies around the world.
The time it takes an average company to meet its tax obligations dropped by four hours last year, while the total amount the average company paid in taxes and the number of payments it made also declined in the past year.
The Paying Taxes 2015 report found that on average, the standard company studied has a total tax rate (as defined under the Doing Business methodology) of 40.9 percent of commercial profits.
It makes 25.9 tax payments per year and takes 264 hours to comply with its tax requirements.
Paying Taxes 2015 measures all mandatory taxes and contributions that a medium-size company must pay in a given year. Taxes and contributions measured include the 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.