BUSINESS IN SHORT

Slovakia loses ground in tax ranking

ONLY 54 out of 183 countries worldwide now have a worse tax environment than Slovakia, according to the latest report prepared by the World Bank, its subsidiary the International Finance Corporation (IFC) and consultancy firm PwC. Slovakia fell by seven positions compared to the previous survey, the Sme daily reported.

ONLY 54 out of 183 countries worldwide now have a worse tax environment than Slovakia, according to the latest report prepared by the World Bank, its subsidiary the International Finance Corporation (IFC) and consultancy firm PwC. Slovakia fell by seven positions compared to the previous survey, the Sme daily reported.

“The ranking of Slovakia has deteriorated in the 2012 study because other countries have done more than Slovakia to reform their tax systems,” said Todd Bradshaw, country managing partner at PwC Slovakia, as quoted in an official press release. He explained that Slovakia occupies such a low position mainly because of its high employment taxes.

“Unfortunately this will not be improved in the short term as the proposed social security reform will not happen,” Bradshaw added.

The Paying Taxes 2012 report found that in all, 123 out of 183 economies measured had made significant regulatory changes since 2006 to ease the tax burden on small and medium-sized firms as governments sought to increase business registrations and ameliorate the impact of the global economic downturn.

Moreover, the report found that as many as 33 economies had acted between June 2010 and May 2011 to make it easier and less costly to pay taxes.

The most common tax reform was to increase use of online systems to facilitate tax compliance, which were introduced in 23 economies. Electronic filing and payment reduces paperwork, allows a more targeted and risk-based approach to audit and compliance, and can help eliminate corruption, wrote PwC.

“The high number of reforms in tax administration shows that improving the tax system for businesses is high on the agenda for governments,” said Augusto Lopez Claros, director of global indicators and analysis at World Bank Group, as quoted on PwC’s website.

He added that if governments create a system that is easy to comply with, it is more likely that businesses will operate in the formal economy and provide a more sustainable source of revenue.


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