Business requirements and regulatory frameworks can sometimes be a burden to the business owners thus hampers growth and performance of the business organization. High tariffs by the customs department, import and export clearing procedures and the time-tax are some of the regulations and procedures that slow down the growth of business. Time tax is the amount of time either the tax officials take dealing with government regulations or the number of times a business person has to visit tax offices for compliance purposes. The meetings are meant to assess whether the firm has met all the government regulations on tax, tariffs and registry requirements. Countries have regulated the number of visits to boost business. However, some of the regions with the highest number of tax official meetings include;
Due to unclear and several tax regulations in most parts of Sub-Saharan Africa, the number of required tax official meeting is particularly many. The region averages 2.2 meetings annually where business people are expected to meet the tax official. While these meetings are aimed at checking and confirming whether the businesses are complying with the customs regulations, that is not always the case as some business people are pressured to give gifts to tax official. The weak controls and unclear procedures are some of the contributing factors to the high number of meetings between the tax officials and the business community. Tax officials also slow down processing of tax issues leading to even more meetings.
East Asia And The Pacific
East Asia and the Pacific and Sub-Saharan Africa are two regions with the highest number of business meetings with the tax officials annually. Business people in East Asia and the Pacific have to meet tax officials for an average of 1.9 meetings. The countries in this region do not have defined tax regulatory procedures and structure thus most tax regulations are enforced and carried out by tax officials onsite. Just like in Sub-Saharan Africa, these meetings are also characterized by business firms being pressurized to give gifts to the tax officials. The high number of meetings has discouraged investors from setting up their businesses in East Asia and the Pacific
Meeting with the tax officials in Latin America averages 1.6 meetings annually with most meetings taking place at the end of each financial year and half way the financial year. The typical meetings include the filing of tax returns, payment of taxes and annual tax inspections. The meetings are aimed at ensuring that the business firms are compliant with the set tax and customs regulations. The businesspeople can also get relevant tax information during the meeting with tax officials. The developing economies of Latin America have facilitated the reduction of the number of meetings between tax officials and firms. The decrease in the number of meetings has enabled many businesses to establish firms in the region.
Other parts with a high number of meetings with the tax officials annually include South Asia 1.5, Caribbean Nations 1.4, Maghreb and Arabic Speaking Countries 1.3, Eastern Europe and Central Asia 1.3, and the Middle East 1.1. The meetings were particularly high in the developing countries with unclear regulation procedures.
Required Tax Official Meetings By Businesses Around The Globe
|Rank||Region||Average Annual Meetings Required Between Businesses and Tax Officials|
|2||East Asia and the Pacific||1.9|
|6||Maghreb and Arabic Speaking Countries||1.3|
|7||Eastern Europe and Central Asia||1.3|
|9||Central Europe and Balkan States||0.9|