The PwC/World Bank Paying Taxes survey for 2019 ranked Qatar and the UAE in second place globally, followed by Bahrain (5th), Kuwait (7th) and Oman (12th) as the top ranked Arab countries in terms of ease of paying taxes; while Algeria (156th), Egypt (159th), Sudan (163rd) and Mauritania (178th) were the lowest ranked Arab countries. The survey measures the direct impact on a medium-size firm of the mandatory taxes and contributions it has to pay, and reflects the government-mandated tax burden that a standard business incurs. It assesses four sub-indicators that consist of the number of tax payments incurred by a business, the total time to comply, the total tax rate as a percentage of commercial profits, and the processes that might take place after a firm files a tax return. The average number of corporate tax payments per year in Arab countries is 20.1 times relative to 24.2 times globally. In comparison, the average number of corporate tax payments per year is 24.9 times in non-GCC Arab countries and 8.7 times in GCC economies. Also, it takes a standard medium-size firm in the region 201.5 hours to prepare, file and pay its taxes relative to a global average of 236 hours. In comparison, it takes a standard medium-size firm 267.4 and 47.8 hours to prepare, file and pay its taxes in non-GCC Arab countries and GCC economies, respectively. In parallel, the corporate income tax rate at a standard Arab firm is 10.6%, the labor tax is at 16.5% and the non-corporate tax is at 6.9% relative to global averages of 16.1%, 16.1% and 8.1%, respectively. In comparison, the corporate income tax rate at a standard non-GCC Arab firm is 13.9%, the labor tax is at 17.9% and the non-corporate tax is at 9.7% relative to averages of 2.8%, 13.1% and 0.4%, respectively, for firms in GCC economies.
Source: PwC, Byblos Research