News Americas, NEW YORK, NY, Mon. Dec. 15, 2015: This year’s World Bank Doing Business report reveals businesses in South America are having to spend an average 620 hours per year on their tax compliance – in comparison with the global average of 264 hours. What lies behind this disparity, and what should regulators be doing to address it?
The latest edition of the annual World Bank Doing Business survey shows South America’s entrepreneurs are spending an average 620 hours per year on tax compliance – more than double the global average of 264 hours, and in stark contrast to OECD countries, at 176.
The latest report, Doing Business 2015: Going Beyond Efficiency, examines the compliance burden on entrepreneurs in 189 jurisdictions worldwide. Russell Bedford member firms have contributed to each of the report’s Paying Taxes surveys since 2009, contributing data on tax regulation, recent reforms, and the real costs of tax compliance.
The report does reveal considerable disparities within South American countries, however. While the compliance burden in Colombia is below the global average, at 239 hours, and that of Peru barely in excess of it, at 293, Ecuador exceeds even the South American average, at 654.
Daniel Ryba, Russell Bedford International board member for South America, attributes the continent’s poor performance to the frequent and numerous tax reforms to which countries have been subject in recent years, the increasing volume of tax information that taxpayers and third parties are now required to submit, and the sheer volume of tax regulations to which businesses are now subject.
Daniel Ryba commented: “Of course, these problems also arise in jurisdictions outside of South America. But the very heavy compliance burden in Ecuador only serves to highlight what many businesses have been aware of for some time. Overly complex – and frequently changing – tax regulation will continue to impact the competitiveness of the continent’s small businesses until this is addressed.”
For more information about the World Bank’s Doing Business reports, visit www.doingbusiness.org
Russell Bedford International is a global network of independent firms of accountants, auditors, tax advisers and business consultants.