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Qatar 2nd Easiest Country to Pay Tax Globally

  • Arab Law

Qatar’s “straight forward” tax system has been recognised worldwide with the country securing the position of “2nd easiest country to pay tax globally” in an annual report issued by PricewaterhouseCoopers, World Bank and IFC.

The report titled “Paying Taxes 2012” cited the Middle East has “fewer and less complex” tax laws in the world. Now in its sixth edition, the report compared tax systems across some 183 countries from a business perspective, revealing that all six Gulf Co-operation Council states fare well within the top 15 countries within the ranking.

The UAE was ranked 6th in 2012 down from 5th in 2011. The rankings of other GCC countries are Saudi Arabia (7), Oman (8), Kuwait (12) and Bahrain (13). On average, there are almost half as many taxes levied in the Middle East, compared to the global average. Moreover, the time to complete tax obligations is significantly lower than the rest of the world. The findings further support the region’s growth prospects and its position on the global stage.

“The Middle East has traditionally been, and continues to be, relatively straight forward when it comes to paying taxes due to the limited number of taxes that are currently levied. A key finding in this year’s report highlights that when governments continue to reform their tax systems they improve their overall rankings to become more internationally competitive. Such reforms might include the ability to file and pay taxes electronically,” PricewaterhouseCoopers said.

The “Paying Taxes” data is produced as part of the World Bank and IFC’s Doing Business study ( Data on business taxes is taken from a questionnaire sent by the World Bank to PwC offices and other third-party contributors around the world. The methodology used to analyse this data and assess the total tax rate in each country is based largely on PwC’s total tax contribution framework.

This year, the country rankings in the report differ from those used by the World Bank in its Doing Business report. The report has applied a threshold to the ranking for the total tax rate to seek to mitigate the effect of low total tax rates on the rankings.
Some of the key findings in this year’s report include continuing tax reforms around the world and making paying taxes easier. In the past seven years more than 60% of the economies made paying taxes easier with 244 reforms. Between June 2010 and May 2011, some 33 economies made it easier to pay taxes.

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