Britain has slid down in the rankings of the best country in the world to do business, according to an influential report.
The UK fell from seventh to ninth place in the World Bank’s Doing Business in 2006 report, its annual study tracking the ease with which one can start a business through the daily operations, taking on staff, enforcing contracts and paying taxes to closing the business down.
Britain’s stumble was chalked up to increased regulation and higher levels of taxation. The report shows that UK firms pay more than twice as much in taxes than those in the United States.
The report found that taxes consume nearly 53% of British firms’ gross profits
New Zealand topped the list with the world’s most business-friendly regulation, followed by Singapore and the United States.
Hong Kong, China, and Denmark placed ahead of the UK at seventh and eighth, respectively.
But while Britain stumbled and the EU’s other big player, France, was notably absent from the World Bank’s Top 30 ranking, the report praised many of the new EU member states in Eastern and Central Europe.
The region was the world’s top reformer, the institution said, and the most common reforms involved simplifying tax administration and reducing tax burdens.
Overall, tax reforms during the last year have led to sharp increases in the number of new start-up businesses in those nations.
“Such reforms allow firms to grow faster and create more jobs,” the report states. “An increasing number of those jobs will be in the formal economy because the benefits of being formal often outweigh the costs.
“And more formal jobs will mean that more workers are protected by pensions, safety regulations and health benefits. Women, who now make up three-quarters of workers in the informal sector, will be big beneficiaries.”