| India is home to the most burdensome tax administration, as measured by the number of pages of central tax laws, among the world’s top 20 economies, a new study has revealed.
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| India, ranked 10th among the world’s 20 biggest countries in terms of GDP, has 9,000 pages of primary tax legislation, global accounting major PricewaterhouseCoopers said in a joint study with World Bank.
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| Tax administration and compliance could be a significant obstacle to businesses and need to be considered a part of reform, PwC’s Peter Cussons said.
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| The study found that the volume of primary tax legislation is on the increase worldwide. This means more new legislation is being enacted than repealed.
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| In the UK over the past 10 years the number of pages has more than doubled from about 3,700 to 8,300, putting it second on the list.
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| The report said a particularly worrying consequence was that with the sheer volume of tax legislation no individual could possibly read all of it. The days of a tax director being confident of spanning all the relevant parts of the tax code seemed to have disappeared, it added. PwC said many countries needed to reflect on the likely deterrent effect of the ever-increasing complexity of their tax laws and the resulting reduction in their international competitiveness.
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| Ultimately, when tax laws became too voluminous, compliance dropped more through ignorance than deliberate evasion, it noted.
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| Australia is ranked third in the list, followed by Japan, the US, Korea, Italy and Canada. China and Hong Kong are at the ninth rank and Germany is at 10th.
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| Switzerland was at the 20th position with just 300 pages, while Brazil and Turkey were ranked at 18th and 19th places with 500 and 350 pages respectively.
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| The study also found that volume of tax laws was not directly proportional to the economic size.
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| The US, ranked number one in GDP and almost three times the size of the next nearest economy Japan, has just 5,100 pages of tax laws compared with Japan’s 7,200 pages.
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| At the same time, India has a lower GDP ranking of 10, but has the most pages of tax legislation, it said. |
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