The 'Tax Simplifier' series aims to make the case for a much simpler tax code with practical recommendations for policy change on a regular basis. Blogs are published twice per week, on Monday and Thursday. Read David's previous blog on bad tax law. You can follow David on Twitter @TaxSimplifier.
Until recently reports published by PricewaterhouseCoopers and The World Bank on “Paying Taxes: The Global Picture” provided a table which showed the number of pages of primary legislation in the world’s top economies.
The 2006 report indicated that India had the longest code, at 9,000 pages, and the UK had the second longest, at 8,300 pages. Other countries, by way of comparison, were the USA - 5,100 pages, Germany - 1,700 pages, Netherlands - 1,640 pages, France - 1,300 pages, Sweden - 700 pages and Spain - 530 pages.
The 2008 report said that “At 8,300 pages the UK has the second longest tax code of any measured country, the longest of any developed economy, and is two and a three quarter times the mean of the twenty countries with the longest tax codes.”
Of course the number of pages in the tax code is a crude measure of complexity - but these figures surely convey a compelling message that our tax code is, by a very wide margin, too long.
Recent versions of this report have focused more on the difficulties for the taxpayer of tax administration, and here the UK comes out very much better. The 2012 rankings for “Ease of doing business”, for example, place us 7th in the world. This is good news.
But one should bear in mind why so many countries, and especially poor countries, rank poorly on administration. The reason is corruption, a problem which is endemic through much of the world. Not only does complex administration confer employment for Government officials but also the possibility of bribes to short circuit bureaucratic procedures. So we should not congratulate ourselves too much on our intelligence for the comparative ease of our administration, but rather our lack of corruption.
When it comes to the complexity of the tax rules themselves, however, we are world leaders for all the wrong reasons!