The joint World Bank and IFC flagship Doing Business report analyzes regulations that apply to an economy's businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on 10 indicators and cover 189 economies.

Apart from paying taxes, the nine other indicators are: starting a business, dealing with construction permits, getting electricity, registering property, trading across borders, getting credit, protecting investors, enforcing contracts, resolving insolvency.

As for the ease of paying taxes, the top rank goes United Arab Emirates, followed by Qatar. The third, fourth and fifth ranks on this indicator have gone to Saudi Arabia, Honk Kong and Singapore.

The report recorded 32 reforms in 189 countries that make it easier or less costly for firms to pay taxes. Europe and Central Asia recorded the most reforms easing compliance with tax obligations, followed by Sub-Saharan Africa and Latin America and the Caribbean.

Eleven economies introduced or enhanced electronic filing, eliminating the need for 74 separate tax payments and reducing compliance time by almost 200 hours in total.

It observes: “Guatemala improved the most on the ease of paying taxes in 2012/13. The Guatemalan tax authority in January 2012 launched its new online system, Declaraguate, for filing and paying all taxes (except labor taxes and mandatory contributions).

The report continues: “The new system allows taxpayers to pay their taxes online without a need to sign a contract and open an account with a specific bank. In addition, Declaraguate has expanded the electronic filing and payment option to such taxes as the solidarity tax. An electronic system for generation, transmission, validation and payment of social security contributions has been available since 2009, through the online platform administered by the Guatemalan Social Security Institute, and by 2012 this payment method had been picked up by the majority of medium-size businesses. This reduced the number of payments from 21 to 7 and the time to comply with tax obligations by 6 hours as measured by Doing Business .”

Twelve economies implemented other measures to ease compliance with tax obligations. Three economies (Albania, Panama and Romania) lowered the number of tax filings or payments. In Albania and Panama corporate income taxes are now paid quarterly rather than monthly. Seven economies merged or eliminated some types of taxes (Armenia, Burkina Faso, the Republic of Congo, Iceland, South Africa, Tajikistan and Uzbekistan).

Two other economies, Qatar and Ukraine, simplified tax returns. Ukraine simplified the corporate income tax, VAT and social security contribution reports filed by companies. In 2012 these efforts reduced the time to comply with Ukrainian tax regulations by 101 hours, from 491 to 390 hours. Eight economies reduced profit tax rates in 2012/13: 1 high-income economy (Sweden), 2 upper-middle-income ones (Gabon and Jamaica), 2 lower middle-income ones (Guyana and the Lao People's Democratic Republic) and 3 low-income ones (Burundi, Myanmar and Tajikistan). Reductions in profit tax rates are often combined with efforts to widen the tax base by eliminating exemptions and with increases in the rates of other taxes, such as the VAT.

In 2012/13 some economies increased the tax burden for small and medium-size firms. Eight increased profit or income taxes (the Arab Republic of Egypt, El Salvador, Greece, Senegal, Serbia, the Slovak Republic, South Sudan and Togo). Four increased labor taxes and mandatory contributions (the Democratic Republic of Congo, Côte d'Ivoire, Tonga and Vietnam). And Bosnia and Herzegovina, Fiji, Mauritania, the Seychelles and Tonga introduced new taxes in the past year.

Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are Hong Kong SAR, China; New Zealand; the United States; Denmark; Malaysia; the Republic of Korea; Georgia; Norway; and the United Kingdom, according to Word Bank release.