SL ranked 171 in Paying Taxes 2014 list

Sri Lanka has been ranked 171st on the Paying Taxes 2014 list of the World Bank.

“In Sri Lanka, an online filing system for social security contribution payments was introduced to make paying taxes easier. The time to comply has fallen from a peak of 256 hours since 2005 to 210 hours in 2012,” a World Bank and PWC report said.

The total tax rate in Sri Lanka can be as high as 55.1 per cent, the report said.

Sales taxes charged on turnover account for the greatest proportion of the Total Tax Rate in Afghanistan, Sri Lanka, Micronesia and the Marshall Islands, while in Myanmar a 20% tax on the value of land and buildings is the largest element.

Five economies reduced their profit tax rates by more than ten percentage points in the last nine years namely, China, Fiji, Pakistan, Sri-Lanka and Timor-Leste. The most common reason for a decrease in the profit tax Total Tax Rate was a reduction in the headline rate of profits tax, though in Sri Lanka it was the introduction of a tax on turnover which was deductible for corporate income taxes that caused the reduction. The greatest increases in profit tax Total Tax Rates were in India and the Maldives. The Maldives introduced a profit tax in 2011 as part of a number of measures designed to diversify the tax base.

The changes in the Total Tax Rates for ‘other’ taxes was driven by just three economies; India, Sri Lanka and Timor-Leste.

Tax rates for companies in India are among the highest in the world and the number of payments is also more than the global average, putting the country at a 158th rank on the ‘Paying Taxes 2014′ list.

Paying Taxes 2014 investigates and compares tax regimes across 189 economies worldwide, ranking them according to the relative ease of paying taxes. The period covered by the study was 2004 to 2012.