With 26% of the global IPO proceeds coming from Chinese issues, the world eagerly awaits the outcome of Investment banking ventures recently forged by the Credit Suisse Group and Morgan Stanley. The planned ventures, if approved by Chinese government regulators, will be between Credit Suisse and the Founder Group (a Chinese conglomerate), and Morgan Stanley with (Shanghai-based) China Fortune Securities Co.

Should the Chinese government approve such ventures, a surge of similar undertakings is being projected. China’s financial market is sharply booming and the rest of the world wants its piece of the action. But what hinders them is the fact that the Chinese financial market, at this point, is largely off limits to foreign investors.

The degree of difficulty or ease in paying taxes is not solely dependent on the tax rates and number of taxes that needs to be settled. There are countries that only have a few taxes but are very hard to comply with. For example, Brazil only has a few taxes and yet, its complicated system requires the taxpayers to devote 2,600 hours (for tax compliance) per year. Here’s what an expert from the global consulting firm PriceWaterhouseCoopers have to say,

“The Brazilian VAT, ICMS (tax on the movement of goods, transport services and communication services), can be charged by the 27 states of the Brazilian Federation. The municipal tax on services (ISS) is charged by more than 5,000 Brazilian municipalities. Each one of these governmental bodies has the power to legislate on the tax computation and collection, guided by one major law that provides general rules – the National Tax Code (CTN).”

As a result, companies in that country are required to maintain additional personnel who are fully dedicated to ensuring their organizations tax compliance.

This is in sharp contrast to the United Arab Emirates which only has three taxes that only takes the tax payer a total of three (3) hours every year to comply.

Source: PricewaterhouseCoopers Report, Paying Taxes in 2008

All over the world, the tax rates, number of taxes and the way it is settled greatly varies. For example, people in Sweden file their tax declarations online using only a single form that covers corporate income tax, value added tax, labor tax, etc.. This is in sharp contrast to the Republic of Congo where corporate income tax alone requires a 50 page form. There are a number of other taxes in the African state with each tax needing an almost equal number of forms to be accomplished.

Here’s the listing of the top and worst states in terms of ease and difficulty of paying taxes:

Easiest/Rank
1. Maldives
2. Singapore
3. Hong Kong, China
4. United Arab Emirates
5. Oman
6. Ireland
7. Saudi Arabia
8. Kuwait
9. New Zealand
10. Kiribati

Most difficult/Rank
169. Panama
170. Jamaica
171. Mauritania
172. Bolivia
173. Gambia
174. Venezuela
175. Central African
178. Republic
179. Congo, Rep.
180. Ukraine
181. Belarus

Source: Paying Taxes 2008, The Global Picture, PriceWaterhouseCoopers