Asia Pacific tax payment rate still below global average

The region takes the longest to claim a VAT refund.

Asia Pacific’s tax payments rate is still below the global average as the region takes the longest time to comply with a value added tax (VAT) refund claim, according to the Paying Taxes 2018 report from the PwC and World Bank.

The region performed poorly in the post-filing index as it takes an average of 30 hours to comply with and 27.2 weeks to obtain a VAT refund in the case of VAT on purchases exceeding taxable sales – a gaping difference from the global average of 18.4 hours.

The most efficient region in terms of post-filing compliance, European Union (EU) and European Free Trade Association (EFTA), take only an average of 7.1 hours to file a VAT refund claim.

However, the region performed strongly in pre-filing processes as its compliance time was decreased to 204 hours, below the global average of 240 hours. Palau takes the least number of hours to comply with tax payments at 52 hours, followed by Brunei and Singapore at 64 hours.

Malaysia, whose transition from Sales Tax to GST in 2015, increased its overall time by 24 hours to 188.

Vietnam takes the longest in terms of time to comply as it takes 498 hours to finish complying with tax requirements.

The number of tax filings and payments was also reduced to 22.1, also below the global average of 24 payments. Hong Kong leads the pack with only 3 payments, closely followed by Singapore at 5 and New Zealand at 7.

Sri Lanka has the most number of payments in the region at 47.