News Release

In Washington, D.C.: In London:

Nadine Ghannam, World Bank Group Natasha Davies, PricewaterhouseCoopers LLP
Phone: + 1 (202) 473 3011 Phone: +44 (0) 20 7212 3343/ +44 (0) 7709 019 290
E-mail: nsghannam@ifc.org E-mail: Natasha.davies@uk.pwc.com

Tax Reform Remains on the Agenda of Governments Despite Economic Downturn

Rome, Italy, November 20, 2009—Despite the economic downturn, government focus around the world has
remained on tax reform, concludes a new report released today by the World Bank Group and
PricewaterhouseCoopers LLP. The report, Paying Taxes, finds that 45 economies made it easier to pay taxes,
almost 25 percent more than in the previous year.

This year’s top reformer, Timor-Leste, introduced a new tax law, streamlined the business tax regime, and
simplified tax administration. For the third year in a row, Eastern Europe and Central Asia had the largest
number of reforms, with 10 economies reforming.

“Government efforts to streamline tax procedures and reduce time spent on compliance can make an important
difference for small and medium enterprises, especially in difficult economic times,” said Penelope Brook, World
Bank Group Director of the Global Indicators and Analysis department. “This year’s top reformer reduced
compliance time by over 50 percent by rationalizing tax regulations, simplifying computation rules, and reducing
payments.”

The report measures the ease of paying taxes across183 economies by assessing the administrative burden for
companies to comply with tax regulations, and also by calculating companies’ total tax liability as a percentage of
pre-tax profits. In the past five years, the report has recorded 171 reforms affecting taxes in 104 economies
worldwide.

While 20 economies have reduced corporate income tax rates, 18 simplified the process of paying taxes. On
average across all of the 183 economies covered in the report, the standard case study company measured has
to make 31 tax payments and spend 286 hours on calculating and paying its taxes.

The results show that corporate income tax is just one of the taxes with which business must comply. On
average, the company pays 9.5 different taxes and corporate income tax accounts for only 12 percent of
payments, 26 percent of the time to comply, and 38 percent of the tax cost.

“The global recession has meant falling tax revenues and difficult tax policy choices,” said Susan Symons,
PricewaterhouseCoopers LLP partner. “The challenge is ensuring sufficient public revenues for the future while
incentivizing investment and economic growth.”

For more information about the Doing Business report series, visit www.doingbusiness.org.

For more information about Paying Taxes, visit www.doingbusiness.org/taxes.

About the World Bank Group

The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries.
It comprises five closely associated institutions: the International Bank for Reconstruction and Development
(IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the
Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment
Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards
for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and
www.ifc.org.
About PricewaterhouseCoopers
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