Sun | Aug 20, 2017

Jamaica improves in PwC tax survey

Published:Friday | November 25, 2016 | 11:00 AM

Global auditing firm PwC acknowledged progress made by Jamaica in cutting out some of the bureaucracy surrounding tax payments, improvements that pushed the country's ranking up thirty to 116, according to the Paying Taxes 2017 report.

Still, while Jamaica was cited as one of the country's showing the most progress, it still needed to do more about the time spent paying taxes, the report's authors said.

It takes 268 hours to pay taxes within Jamaica and requires 11 payments. Comparatively, in the United Arab Emirates (UAE) it takes 12 hours. Both UAE and Qatar hold the top spot as the easiest places to pay taxes. Chad was the worst on the list, at 766 hours to pay.

"Jamaica showed the greatest improvement on the number of payments sub-indicators, reducing the number of payments for 2015 by 26 to 11. Electronic tax filing was introduced several years ago, but it was only in 2015 that taxpayers were required to file tax returns electronically, so the systems are now used more widely. This is similar to the position in Mongolia and Kosovo, both having a reduction of 22 in the sub-indicator to 19 and 10, respectively," the PwC report said.

This is the 11th edition of Paying Taxes - incorporating up to 12 years' worth of data on tax systems in 190 economies around the world. The survey is designed to measure the 'ease of paying taxes' and is part of the World Bank Group's 'Doing Business' project, which itself measures the 'ease of doing business' by looking at 11 indicators, including the paying taxes indicator.

The lowest tax rates in the Caribbean and Central America, 20 nations overall, are Belize at 31 per cent, Trinidad and Tobago at 32.2 per cent, Bahamas at 33.8 per cent and Jamaica at 34.3 per cent. The tax haven of the Cayman Islands was not included the study.

The Paying Taxes study looks at how easy it is for a standardised, medium-size domestic company to pay its taxes.

In Central America and the Caribbean, the report notes that the time to comply has risen slightly, due to the introduction of the value added tax in The Bahamas.

"It remains the region where profit taxes account for the greatest share of the Total Tax Rate, but the lowest share of the time to comply," the report.

The region, however, does not fare well on a new measure within the report, called 'post-filing', which outlines the time and procedures required to get back tax refunds. Within the Caribbean and Central America, all four components of the post-filing index take longer than the global averages. The region takes the longest time to comply with, and to obtain, a VAT refund.

steven.jackson@gleanerjm.com