Dubai – MENA Herald: According to the latest release of the Paying Taxes report by The World Bank and PwC, the UAE continues to maintain its first position in the global ranking for ease of tax payment.

With the least demanding tax framework, well below the world average, the UAE has a total tax rate of 15.9%, four average number of payments and an average time to comply of 12 hours. The report analysed the same factors in 189 countries, with global averages of 40.8% total tax rate, 25.6 average number of payments, and average time to comply of 261.

Despite a small increase in the Total Tax Rate since the previous year, the Middle East region as a whole is the easiest region in which to pay tax. It has the lowest Total Tax Rate and time to comply, and all of the sub-indicators have been stable since 2004.

“The annual report is a powerful index in shaping discussion on tax reform and fiscal policies for many governments. The latest findings from the study reveal that while the region remains the easiest to pay taxes in, the implementation of the VAT will bring a portfolio of new discussions to tax reform,” said Dean Kern, Partner, PwC’s Middle East Tax and Legal Services Leader.

Recent discussions on the implementation of the VAT in the GCC will transform the tax system in the UAE. The intention is to have a common framework agreed at the GCC level, based on which GCC states will introduce their national VAT systems.  

Commenting on the report Jeanine Daou, Partner and Middle East Leader for Indirect Taxes and Fiscal Policy said: “The Paying Taxes report helps inform the discussion around tax reform, a topic that is currently extremely relevant in the GCC. The UAE and GCC governments will need to make strategic decisions concerning key elements in the system, including harmonization of a number of areas across the GCC to make the VAT system fully efficient and compatible with the requirements of a common market. In addition, a certain level of harmonization of rules and simplification across the GCC will help reduce VAT compliance costs for GCC businesses which would contribute significantly to increasing the competitiveness of GCC companies.”  

She added that, “Another important area of focus for the UAE and GCC governments is to build an effective the tax administration to ensure a smooth and efficient VAT implementation. This will also require the right level of coordination across the GCC notably in terms of exchange of information as well as coordinated approach to monitor and control intra-community trade.”

The UAE currently shares an equal first place with Qatar in the overall tax ranking, with a Total Tax Rate of 15.9%, 12 hours and four payments.

Overall ranking for Middle East countries ranking in the global top 50:

  • Qatar and United Arab Emirates – 1st  
  • Saudi Arabia – 3rd  
  • Bahrain – 8th  
  • Oman – 10th  
  • Kuwait – 11th  
  • Lebanon –45th

*please note that Egypt was ranked 151, but was included in the analysis for Africa and not the Middle East.