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2012 Benchmark Survey on VAT/GST

Despite the shift to indirect tax globally a new survey released by KPMG International shows that businesses are simply not keeping pace. In fact, according to KPMG International’s 2012 Benchmarking Survey on VAT/GST, VAT/GST continues to be under-resourced, under-managed and under-measured by the majority of global businesses.

This year’s survey builds on the success of the first ever global VAT/GST benchmarking survey, published by KPMG in 2011, with new questions and comparative analyses for 225 respondents headquartered in 24 countries.

Highlights from the survey include:
- Significant opportunities are being missed to manage risk more efficiently and effectively, improve cash flow and reduce bottom-line cost.
- There is greater evidence of quality VAT/GST management in Europe, the Middle East and Africa (EMEA). In Asia Pacific (ASPAC) and Latin America (LATAM), however, businesses should be concerned about how compliance risks are being managed.
- On average, larger businesses demonstrate higher levels of performance benchmarking and resource allocation to VAT/GST. Businesses in the financial services sector are much more likely to judge the effectiveness of their tax department with VAT/GST in mind and set key performance indicators (KPIs) to do just that.
- Compared to the 2011 survey results, there is tangible evidence that some businesses have started to take steps in the right direction to deliver effective VAT/GST management on a global scale, although there is still a long way to go to keep pace with the obligations, risks and opportunities which the shift to indirect tax globally is creating.

Why measure VAT/GST performance?

Around the world the shift to indirect taxes, such as Value Added Tax (VAT)/Goods & Services Tax (GST), away from direct tax is clear. Governments increasingly look to indirect tax as a means of maximizing tax yields. However, something has been missing as part of this debate – until now. While the effective tax rate and cash tax rate are metrics commonly used by businesses to measure corporate tax performance, there are limited established benchmarks for the measurement of VAT/GST performance. In fact, even the concept that such performance benchmarks can exist for VAT/GST is alien to many.

However, we believe in the old adage that “what gets measured gets done”; therefore, we think it is critical for businesses to objectively assess how efficient and effective they are at managing what is rapidly becoming one of the most important and riskiest of global tax obligations.

Sounds sensible, doesn’t it? Assessing VAT/GST management should help make the case for change and assist in designing suitable performance measures to track performance over time and against industry or other benchmarks.

That’s where KPMG’s Benchmark Survey on VAT/GST comes in. In 2011, KPMG’s Global Indirect Tax Services practice published the first publicly available Benchmark Survey on VAT/GST. Twelve months on, we are now delighted to release the 2012 Benchmark Survey on VAT/GST which builds on last year’s survey while taking it to a different level by doubling the number of respondents and drilling down into more detailed areas.

In addition, this year we have done a separate section at page 32 of the survey focusing on businesses operating in the Financial Services (FS) sector looking at where there may be significant differences between respondents in the FS and non-FS sectors.

KPMG’s Global Indirect Tax Services practice will continue to conduct the survey on an annual basis to monitor the evolution of VAT/GST tax benchmarks globally. The information which we gather will offer insights to businesses that allows them to assess emerging best practices, industry benchmarks and geographic or other variances.

We invite you to read our 2012 Benchmark Survey on VAT/GST and encourage you to reflect on what it means for your business by asking yourself the following questions:
- How is my business managing its VAT/GST obligations now?
- How does it compare to the survey results?
- What would I like to change?
- How can I build the case for change?
- How will I be able to measure the “value-add”?

Profile of respondents
- 225 respondents representing businesses headquartered in 24 countries.
- Twenty-four percent of respondents work in financial services companies.
- Seventy-three percent of respondents have VAT/GST turnover above US$1 billion, 38 percent have turnover above US$10 billion, and at least 28 percent have turnover of above US$20 billion (larger businesses).
- Only 35 percent of respondents are VAT/GST specialists. The remainder have a general tax or finance background.

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.

Download Now. 2012 Benchmark Survey on VAT/GST (4.16 MB) (40 pages)

Vendredi 25 Mai 2012

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