THE Philippines is not the easiest country to pay taxes in, according to a study conducted by international audit firm PricewaterhouseCoopers (PwC).
Out of 189 economies reviewed in the report called “Paying Taxes 2015” for ease of paying business taxes, the Philippines ranked 127.
In the country, it takes 193 hours for a business to comply with 36 required payments, according to the PwC study. On average, a Philippine employer pays 42.5 percent in taxes and contributions, 6 percent above the average tax rate in the Asia Pacific region.
Sen. Francis Escudero, citing the study, said the Philippines has one of the most tedious processes for paying taxes in the world and holds the highest income tax rate in Asia.
“Where else will you find a country that taxes its people severely and then makes it hard for them to pay?” he said
Escudero further pointed out that the Philippines is three ranks above Sierra Leone and 12 ranks ahead of Sudan.
“In fact, it’s even easier to pay taxes in Iraq, Iran and Afghanistan. What does that say about us?” he said.
The PwC study is completed annually and is included in the World Bank Group’s “Doing Business” project. It attains its findings by assessing the length of time it takes mid-sized companies to prepare, file, and pay its taxes; the number of taxes a business must pay; the method of payment; and the total tax liability as a percentage of its commercial profits.
On Monday, Oct. 19, the Malacanang said it would continue working to simplify the tax paying process.
The government, through the Bureau of Internal Revenue, is taking measures to make paying taxes more efficient to boost the economy, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said, according to CNN.
Simplifying taxes in the Philippines is key to sustaining the stability and growth it has attained in the last five years, said Steve Forbes, chair and editor-in-chief of Forbes Manila, according to InterAksyon.
Neighboring Asian nations ranked significantly higher than the Philippines, including Hong Kong and Singapore, which ranked fourth and fifth with three and five tax payments, respectively.
“How can we encourage investors to come and put their money here when a third of that will go to taxes that will be difficult to pay?” Escudero said.
The senator urged Filipinos to make tax reforms an election issue so more leaders would back legislative efforts to amend the Tax Reform of 1997, according to InterAksyon.
“Everyone is now singing the same tune, even those who were hesitant to support us in the past. And that’s fine. The important thing is to let this campaign for tax reforms gather steam because it is a legitimate issue that begs to be addressed if we want to sustain economic growth,” he said.
United Arab Emirates and Qatar tied for the top spot on the list, requiring four payments that could be completed in 12 hours and 41 hours, respectively.
Bolivia ranked last among the 189 countries, with its tax procedure requiring 42 payments that take 1,025 hours to complete.
