Post by radovic on Nov 22, 2007 10:56:04 GMT -5
World Bank Slates Bosnia Tax System
21 11 2007 Sarajevo _ Lack of recent reforms and a complex payments regime have pushed Bosnia a long way down in the latest international league table on tax sytems.
A new global report, “Paying Taxes 2008”, launched on Wednesday by the World Bank and the multi-national accountants giant, PricewaterhouseCoopers, ranks Bosnia and Herzegovina, BiH, in 142nd place, down from 111th last year.
The report, which covers 178 countries around the world, urges governments to simplify their tax systems, ease the compliance costs on business and reduce tax rates.
It says that such reforms can broaden the tax base and increase government revenues, thereby creating a win-win situation.
While countries in Eastern Europe and Central Asia registered the most reforms in 2006 and 2007, tax rates and the compliance burden in some countries in this region still remain among the highest in the world.
BiH’s big drop in the league table seems to reflect an almost complete year-long halt in the pace of reforms due to its deepening political crisis.
Its performance has also been affected by the complexity of tax payment formalities, with businesses having to make 51 annual payments on average.
By contrast, Slovenia, with 22 separate payments, is ranked 58th.
The average working time a Bosnian company takes to prepare all these payments is estimated at 368 hours, compared with just 96 in Macedonia, the World Bank press release says.
“Strong performance in collection of VAT [value added tax] proceedings over the past two years enables BiH to consider reducing other taxes that burden companies,” the press release quoted World Bank Country Manager in BiH, Marco Mantovanelli, as saying.
“As the report shows, government efforts to reform the taxes on corporate profits and personal income are very much needed, and I would specifically stress the need to reduce the rates of contributions on wages as a major burden on the private sector and an obstacle to employment in the formal sector.”
21 11 2007 Sarajevo _ Lack of recent reforms and a complex payments regime have pushed Bosnia a long way down in the latest international league table on tax sytems.
A new global report, “Paying Taxes 2008”, launched on Wednesday by the World Bank and the multi-national accountants giant, PricewaterhouseCoopers, ranks Bosnia and Herzegovina, BiH, in 142nd place, down from 111th last year.
The report, which covers 178 countries around the world, urges governments to simplify their tax systems, ease the compliance costs on business and reduce tax rates.
It says that such reforms can broaden the tax base and increase government revenues, thereby creating a win-win situation.
While countries in Eastern Europe and Central Asia registered the most reforms in 2006 and 2007, tax rates and the compliance burden in some countries in this region still remain among the highest in the world.
BiH’s big drop in the league table seems to reflect an almost complete year-long halt in the pace of reforms due to its deepening political crisis.
Its performance has also been affected by the complexity of tax payment formalities, with businesses having to make 51 annual payments on average.
By contrast, Slovenia, with 22 separate payments, is ranked 58th.
The average working time a Bosnian company takes to prepare all these payments is estimated at 368 hours, compared with just 96 in Macedonia, the World Bank press release says.
“Strong performance in collection of VAT [value added tax] proceedings over the past two years enables BiH to consider reducing other taxes that burden companies,” the press release quoted World Bank Country Manager in BiH, Marco Mantovanelli, as saying.
“As the report shows, government efforts to reform the taxes on corporate profits and personal income are very much needed, and I would specifically stress the need to reduce the rates of contributions on wages as a major burden on the private sector and an obstacle to employment in the formal sector.”