Market leading insight for tax experts
View online issue

UK has second most effective tax system in G20

printer Mail

The UK has the second most effective tax system in the G20 for ease of paying business taxes, according to the latest edition of PwC and The World Bank Group’s ‘Paying Taxes’ report. The average medium-sized UK business spends 105 hours filing tax return, which is around half the global average.

Nevertheless, for the second year running, the UK tax system ranks only 23rd overall among the 190 global economies considered in the report. Hong Kong SAR has the world’s most effective tax system, with Qatar and the United Arab Emirates in equal second place, just ahead of Ireland. Canada, which has the most effective tax system in the G20, ranked 19th overall.

The report looks at the overall tax rate and time spent preparing, filing and paying the three main taxes (corporation tax, labour taxes and VAT).

Kevin Nicholson, UK head of tax at PwC, said: ‘As Brexit approaches and technological developments continue apace, it’s never been more important that UK businesses are able to engage with an effective and simple tax system’.

‘Business can take comfort that the UK has retained its position as having one of the most effective tax systems in the G20 when it comes to the ease of paying taxes’, Nicholson added.

The report suggests that tax authorities throughout the world could do more to realise the full potential of new technology to reduce the tax compliance burdens on taxpayers, with illustrations of developments in tax software, real time reporting systems and data analytics. However, technology’s impact is uneven and has only produced relatively modest gains in effectiveness in 2017. The success of HMRC’s making tax digital programme in the UK will be assessed in future editions of the report.

Andrew Packman, leader for tax transparency and total tax contribution at PwC, said it was important to remember that improvements to tax systems do not come from technology alone. ‘Simple, coherent, well understood and properly administered tax systems can help to lower the barriers for businesses to move from the informal to the formal sector. This can broaden the tax base and raise revenue without requiring new taxes’, he said.

Paying Taxes 2019’ is available at