In this quarter’s Deep Dive Survey, we poll CFOs about their attitudes toward corporate taxes, and their hopes for changes at the federal level (see “Ready for Reform“). A new study from PricewaterhouseCoopers, meanwhile, sheds some light on what companies actually pay around the world. Test your grasp of the good, the bad, and the taxing.
1) Based on three measures — number of payments required, time required, and total tax rate (which includes income taxes on profits, labor taxes/contributions, and consumption/other taxes) — which country ranks as the most difficult in which to pay taxes?
C. Hong Kong
D. United States
2) Which global region accounts for 5 of the 10 countries deemed to have the easiest tax systems?
A. South America
C. Middle East
3) Mauritius overhauled its corporate tax system in 2006, hoping to raise more revenue by dropping the corporate rate from 25% to 15% and removing exemptions and allowances. As a result, corporate income tax revenue in 2008–2009:
A. Rose by 65%
B. Rose by 22%
C. Rose by 4%
D. Fell by 47%
4) Across 183 economies, the current total tax rate averaged what percent of corporate profits?
5) The percentage in Question 4 represents what change from five years ago?
A. An increase of 8%
B. An increase of 3%
C. A decrease of 4%
D. A decrease of 6%
6) The percentage of total tax rate that comes from corporate income tax averaged:
7) Of the more than nine different kinds of taxes typically paid by companies, the one that is the most time-consuming to address is:
A. Corporate income taxes
B. Value-added taxes
C. Property taxes
D. Payroll taxes
8) The most popular type of tax reform, enacted by 17 countries in 2009–2010, is:
A. Adopting an e-filing system
B. Allowing companies to self-assess their tax bills
C. Cutting the corporate income tax rate
D. Reducing criminal penalties for non-compliance
9) Who said “Taxes are the price you pay for civilization”?
A. Oliver Wendell Holmes
B. John Adams
C. Julius Caesar
D. Barack Obama
10) When was the U.S. income tax system formally encoded into law?
A. In the U.S. Constitution, 1787
B. During the Civil War
C. As an amendment ratified in 1913
D. It is not, in fact, encoded in law
Source: “Paying Taxes 2011 — The Global Picture,” from PricewaterhouseCoopers, the World Bank, and International Finance Corp.
Answers: 1–B; 2–C; 3–A; 4–B; 5–D; 6–C; 7–B; 8–C; 9–A; 10–C