Following the ratification of its new network structure PricewaterhouseCoopers today announced the following appointments to its Network Executive Team (NET). The NET, which reports to PwC’s Network Leadership Team will be responsible for key service line and functional areas across the PwC network. The appointments were announced by PricewaterhouseCoopers’ Global CEO Samuel A. DiPiazza, Jr. “Since its formation ten years ago, PricewaterhouseCoopers has experienced strong, sustained global growth. We are very fortunate to have intelligent, strong leaders who will assume the critical responsibilities of guiding our global network through the next phase of our development and help us to build on our growth over the last ten years,” Mr. DiPiazza said.

Donald A. McGovern Jr. of the U.S. has been appointed Global Leader for Assurance. Mr. McGovern succeeds Rob Ward of Australia who had served in the post since 2005 and has returned to PwC Australia. Mr. McGovern has served as Global Engagement Partner for such significant PwC clients as Cisco Systems Inc and Schlumberger Ltd. He led the PwC office in San Jose California and was prior to his new role Vice-Chair Markets, for the New York Metro region of PwC U.S.

Richard Collier-Keywood of the U.K. has been appointed Global Leader for Tax. Mr. Collier-Keywood has led the UK tax practice for the past five years. and succeeds Gene Donnelly, who had been Leader of both the Global Tax and Advisory practices and has returned to PwC U.S. Mr. Collier-Keywood will also serve as Managing Partner of PwC U.K.

Juan Pujadas of the U.S. has been appointed Leader of Global Advisory and also will continue in his role as Leader of Advisory for PwC U.S. Mr. Pujadas has spent much of his career in the financial services industry and is experienced in many markets around the world.

Moira Elms of the U.K. has been appointed Global Leader of People & Culture, Brand & Communications. Prior to this appointment Ms. Elms was the leader of Marketing and Business Development and Knowledge as well as Brand and Communications for PwC U.K. She previously was the Human Capital Leader for the U.K. firm and has served as Chairwoman of the PricewaterhouseCoopers Global Gender Advisory Council for the last two years. Ms. Elms, a tax partner, succeeds Richard Baird of the U.S., who was Leader of Global Human Capital and has returned to PwC U.S.

Edgardo Pappacena of the U.S. has assumed the newly-created role of Leader of Global Strategic Sourcing. Mr. Pappacena has been Global Leader of Strategy as well as Brand and Communications. In his new role, he will focus on the development of new business and delivery models.

Peter Wyman of the U.K. has been appointed Global Leader of Public Policy & Regulatory Matters. He succeeds Richard Kilgust, who has retired from PwC after 36 years of service. Mr. Wyman, a tax partner, has been leader of the Public Policy and Regulatory Matters for PwC U.K. and serves on the profession’s Global Public Policy Committee.

Donald Almeida of the U.S has been appointed Leader of Global Clients and Markets He succeeds Alec Jones who has returned to PwC U.K. Mr. Almeida currently serves as PwC’s Global relationship Partner for IBM. He has served as U.S leader of the Technology, InfoComm and Entertainment practice, combining industry management skills with large account-management experience.

Pierre Coll of France has been appointed Global Leader of Risk & Quality: He succeeds Michael Gagnon of the U.S. who has retired after 35 years with PwC. Mr. Coll was previously our Leader of Assurance for PwC’s continental European firms. He has worked in the US and Germany, and has served large multinational clients throughout his career.

Tony Harrington of Australia has been appointed Global Leader of Global Strategy and Network Transformation. Mr. Harrington has served for the last eight years as the Territory Senior Partner for PwC of Australia. He has been a member of the Global Extended Leadership and served on a number of high level global PwC programmes.

In addition to the new appointments, Javier Rubinstein of the U.S. will remain in his role as PwC’s Global General Counsel, and Paul Boorman of the U.K. will remain in his role as our Global Leader of Operations.

PricewaterhouseCoopers today disclosed that total gross revenues for its worldwide network of firms rose to a record US$28.2 billion for the fiscal year ended 30 June 2008, an increase of 8 per cent at constant exchange rates. At variable rates of exchange, growth was even higher at 14 per cent.

Revenues from tax operations were up 13 per cent to US$7.5 billion, reflecting strong growth across the full range of service offerings. For the first time tax and advisory accounted for more than half of PwC’s global revenues, 51 per cent, compared with 48 per cent in FY2007 and 44 per cent four years ago.

Nearly two-thirds of senior executives around the world say they have experienced some form of actual or attempted corruption in their business dealings, according to a report by PricewaterhouseCoopers LLP. The report ‘Confronting Corruption: The business case for an effective anti-corruption programme’ finds that almost 80 % of executives say they have anti-corruption programmes in place at their company, but only 22 % are confident the programs are effective. PricewaterhouseCoopers commissioned the Economist Intelligence Unit to conduct a global survey and in-depth interviews with senior executives and anti-corruption specialists. Survey respondents, comprised of 390 senior executives from 70 countries, indicated the significant operational impacts of corruption:

• 63 % said they had experienced some form of actual or attempted corruption;
• 45% said they had not entered a specific market or pursued a particular opportunity because of corruption risks;
• 39% said their companies had lost bids because of corrupt officials; 41% said their competitors paid bribes.

Executives say they feel particularly vulnerable to corruption when doing business in expanding markets such as China, India, Russia and South America. In addition, 70% of the executives surveyed stated that a better understanding of corruption would help them compete more effectively, make better decisions and improve corporate social responsibility as they enter new business environments. This sentiment is further backed up by the UK responses to PricewaterhouseCoopers recent Global Economic Crime Survey citing that nearly half (49%) of UK fraud cases involve an overseas party. The possible impact of economic crime is considered a significant factor in about half of investment decisions, with 90% of UK respondents citing corruption as their major concern when doing business with emerging economies.

Andrew Gordon, partner, forensic services, PricewaterhouseCoopers LLP said:

“The rapid growth of corruption and bribery as a form of fraud in the UK underlines the increasingly globalised business world in which we operate. As emerging economies become increasingly important business partners, companies now have a compelling business case to support the development and implementation of a formal and strategic anti-corruption programme.

“In recent years, companies caught breaking anti-corruption laws have individually paid hundreds of millions of dollars in fines and several chief executives have stepped down in disgrace. This situation is not limited to UK companies. Globally, we are seeing a marked rise in enforcement actions that should cause C-Suite officers to ensure they have adequate programmes in place to mitigate this risk.”

In addition to the obvious monetary damages corruption causes, the damage to a company’s reputation is also of major concern. When asked about the fallout from corruption allegations, 55 % of respondents to the survey say the most severe impact would be to their corporate reputation - a greater percentage than the combined total of those who say legal, financial and regulatory impacts would be the most severe.

Andrew Gordon partner, forensic services, PricewaterhouseCoopers LLP continued:

“As management and staff become distracted and demoralised, customers and business partners distance themselves from the company and even internal safeguards against such things as theft and financial statement manipulation eventually become suspect. Without a strategic action plan in place, a company may not even be aware of its vulnerability until it is too late.”

While companies are generally responding to the risk of corruption, the survey indicates that many companies’ underlying policies and controls do little to identify and mitigate risk due to poor design or implementation:

• Slightly less than half say their programme is clearly communicated and enforced;
• Rigorous risk assessment, a crucial step in programme design, is overlooked by more than half of those surveyed, and only 25 % perform proactive risk assessments or monitoring;
• Only 40 % of respondents believe their current controls are effective at identifying high-risk business partners or suspect disbursements.

It is not, however, all bad news; drawing from interviews with experts and real life case studies from global companies, the report provides practical guidance for operating in challenging environments. Leveraging efforts by leading non-governmental organisations focused on the issue, the report also includes a model for an effective anti-corruption programme that can be tailored to any environment.

Findings from a poll, carried out by PricewaterhouseCoopers LLP at its Breakfast Briefing event following the Budget show that UK business leaders are not optimistic about the UK economy and the competitiveness of the tax system.

Only 25% of senior executives say they expect the growth of their business to continue while 24% expect business activity to stagnate. Just over one third (36 per cent) of senior executives believe they will, to some extent, be tightening their companies’ belts in the course of the next year because of the current economic climate.

Despite reassurance from the Chancellor of the Exchequer about the resilience of the economy, overall confidence in the shape of the UK economy has diminished. While 81 per cent of business leaders questioned over the last two years thought that the UK economy was in relatively good shape following Budget announcements, this year only one third (36 per cent) were inclined to agree with this statement.

The tax system

The Budget will be of some relief to UK business because it contained few major surprises. This was particularly important given the amount of change already in-hand. Despite the Red Book and a raft of supporting press releases and documentation, this year’s Budget was more about consolidation, with net reduction in tax payments forecast for 2008/09 of GBP 140m for the measures announced on Wednesday. However, the measures will lead to a net increase in taxation for 2009/10 of GBP 790m and GBP 1.865bn for 2010/11.

However, a lack of progress in some areas could impact the attractiveness of the UK for business from a tax perspective. Two thirds (66%) of senior executives think the UK tax system is less competitive than it was five years ago

Mark Schofield, tax partner, PricewaterhouseCoopers LLP, said:

“It was encouraging to see that there were few surprise changes for large business. However, the challenge of maintaining a competitive tax system in the UK remains.

“Although the Red Book announces that a consultative document on the taxation of foreign profits will be published before summer 2008, businesses remain in the dark as to how this will affect them when the rules are introduced. The proposed new measures for principles based taxation, which are now subject to further consultation, could also give an unfavourable impression of the UK to potential investors.

“Business needs a certain, stable, attractive and coherent tax system to have the confidence to invest in the UK. Therefore the Chancellor must demonstrate clearly how he is going to deliver the government’s commitment to consultation with business to maintain a stable business tax system that remains responsive to business needs and internationally competitive”

As with any Budget, there are winners and losers. The Chancellor’s focus remains on how to retain investment from portable industries in the UK, i.e. the more internationally mobile businesses such as financial services companies, service companies generally and non-capital intensive businesses will benefit from the reduction in mainstream corporation tax from April 2008. On the other hand, industries with more physical capital such as the oil and gas, manufacturing and capital intensive industries could be disadvantaged as a result of the asset depreciation measures.

Survey questions

The PricewaterhouseCoopers Budget Breakfast event took place in London on 13 March 2008. The event was attended by 104 chairman, chief executives, managing directors, chief operating officers, financial directors, chief financial officers and non-executive directors from some of the UK’s largest businesses.

The following experts from PricewaterhouseCoopers LLP are available to offer analysis and comment in the lead up to, and on the day of, the Chancellor of the Exchequer’s 2008 Budget speech due to take place at 12.30pm on Wednesday 12 March. Please contact the experts direct or call the PricewaterhouseCoopers Budget media hotline on 020 7804 6924.

General overview: Will the Chancellor set out his vision for the tax system in his first full Budget?
John Whiting: T: 020 7804 4422, M: 07710 027595
Richard Collier-Keywood: T: 020 7213 3997, M: 07802 200149

The economy and public finances: How will the Chancellor respond to slowing economic growth and rising public borrowing?
John Hawksworth: T: 020 7213 1650

General corporate tax issues: Will the Chancellor go further than just cutting the rate of corporation tax to ensure the UK remains internationally fiscally competitive?
Mark Schofield: T: 020 7212 2527, M: 07802 757741

EU corporate tax issues: Taxation of foreign profits, will the Chancellor make an announcement?
Peter Cussons: T: 020 7804 5260, M: 07801 743376

Tax and the environment: Will the Chancellor put a long term structure in place for the direction of tax policy and the environment?
John Manning: T: 020 7212 8894, M: 07711 063719
Nick McChesney: T: 020 7804 2106, M: 07771 701667

HM Revenue & Customs (HMRC) powers: Current consultations on HMRC powers; will the Chancellor make any further announcements?
Stephen Camm: T: 020 721 23142, M: 07710 737703

Employment taxes: Will there be any plans to extend existing tax and NIC exemptions to support changes in environmental and social needs?
Matthew Hunnybun: T: 020 7212 6927, M: 07710 611648
Gary Hull: T: 020 7212 2712, M: 07710 397763

Entrepreneurs/private companies: Will we see the promised package for enterprise? Will there be a fundamental review of the tax system for small business?
Kevin Nicholson: T: 01509 604232, M: 07703 130953

Personal taxes: How to cope with the CGT and income tax changes - are there any more to come?
Leonie Kerswill: T: 020 7213 8588, M: 07714 226697
Clive Mackintosh: T: 020 7804 5614, M: 07710 371362

Wealth advisory: Will the Chancellor announce plans to encourage saving rather than spending?
Phil Wood: T: 0121 265 5766, M: 07711 771362

Residence and domicile: What impact could the new rules have?
George Yeandle: T: 020 7212 4638, M: 07710 385269
Leonie Kerswill: T: 020 7213 8588, M: 07714 226697

Pensions: Will there be news on rules around sponsor access, which will encourage better scheme funding with less concern of trapped surpluses?
Raj Mody: T: 020 7804 0953, M: 07974 969320
Marc Hommel: T: 020 7804 6936, M: 07801 767373

Singapore ranks second, after the Maldives for the ease of paying taxes, says a recent report launched by the World Bank, IFC, and PricewaterhouseCoopers (PwC). Paying Taxes 2008, the second report in an annual series on tax systems, covers 178 countries worldwide. The report concludes that there is a win-win opportunity for governments and firms if governments simplify tax systems, ease the compliance cost on business, and reduce tax rates.

Singapore performed favourably in the indicators measured, garnering its leading position. The poll reports that on average, a company here takes only 49 hours per year to comply with tax obligations. With only 5 tax payments that companies are required to pay in the city state, Singapore is ranked within the top 10 in terms of fewest number of tax payments.

“Singapore has a strong reputation for the ease of conducting business. An effective tax administration, together with a streamlined, efficient tax collection process, is fundamental to the ability to do business in a country. Given that an inefficient tax system disproportionately affect smaller businesses, it is critical to a country’s development to continue to streamline processes or risk being left behind. Companies operating in Singapore benefit from an efficient tax system and low rates of tax and are therefore better able to concentrate on their core business competencies,” says Paula Eastwood, Head of Corporate Tax, PricewaterhouseCoopers Singapore.

Tax reforms that make it easier for firms to pay taxes can increase government revenues by broadening the tax base. This year, 31 economies improved their business tax systems, and 65 have done so over the past three years. Bulgaria was the top reformer, and Turkey was runner-up. While reducing corporate income tax was the most popular reform, implemented in 27 economies worldwide, many countries have reduced the compliance burden by simplifying or eliminating other business taxes. Countries in Eastern Europe and Central Asia had the most reforms in 2006 and 2007, but tax rates remain highest there and in Africa. The compliance burden is highest in Latin America and in Eastern Europe and Central Asia.

“Reducing the tax burden was the second most popular reform of the business regulatory environment this year. Despite previous reluctance to reduce tax burdens for fear of cutting government revenues, some governments that have implemented tax reform have reaped the benefit of higher investment and economic growth,” said Rita Ramalho, coauthor of the report and tax specialist with the World Bank/IFC Doing Business project. “Economies with a lower business tax burden also have more new firms entering the market.”

The case of Egypt is instructive. Two years ago it implemented major tax reforms, which included reducing the corporate income tax rate by almost half. This has increased the government’s tax base and revenues.

This year the top 10 economies for ease of paying taxes are, in order, Maldives, Singapore, Hong Kong, United Arab Emirates, Oman, Ireland, Saudi Arabia, Kuwait, New Zealand, and Kiribati. The 10 economies where it is most difficult are, from 169 to 178, Panama, Jamaica, Mauritania, Bolivia, the Gambia, Venezuela, the Central African Republic, the Republic of Congo, Ukraine, and Belarus.

Complying with administrative tax requirements remains a real burden for business. Globally, on average, a company spends almost two months a year complying with tax regulations 15 days for corporate income taxes, 21 for labor taxes and contributions, and 21 for consumption taxes. However, there are wide variations between countries. For example, it takes 105 days to comply with consumption taxes in Azerbaijan but only one day in Switzerland.

The study allows direct comparison of tax systems from around the world. It shows how businesses are affected not only by tax rates, but also by the procedural burden of compliance. The report focuses on the number of tax payments made, the time it takes to comply, and the cost of taxes, which is measured by the total tax rate. The total tax rate covers five types of taxes that firms pay: profit, social, property, turnover, and other taxes, such as municipal fees and fuel taxes. The steps, time, and cost indicators are used to determine the overall ease of paying taxes.

Compliance issues can significantly affect the overall ranking, either counteracting the benefit of a low tax rate or mitigating the impact of a high tax rates. Scandinavian countries, while known for high taxes, do well on the ease of paying taxes because of a low compliance burden.

The report calls on businesses to play a strategic part in reform. Ms Eastwood added: “Businesses could be more upfront in revealing their total tax contributions, to help governments assess their real economic footprint. More and better information about the taxes paid and the cost of compliance is essential to understanding how tax systems affect businesses. It is clear that governments need to look across all taxes when considering reform. Greater transparency helps focus public debate on where reform efforts are most effective. Ultimately, this will give business more confidence and willingness to invest.”

In addition, the report shows how widely tax systems vary in Asia. Singapore (2nd) and Hong Kong (3rd) are among the top 10 countries cited for ease of paying taxes. A snapshot of other Asian economies’ performance includes: Brunei (28th), Cambodia (21st), China (168th), India (165th), Indonesia (110th), Japan (105th), Korea (106th), Lao (114th), Malaysia (56th), Philippines (126th), Taiwan (91st), Thailand (89th) and Vietnam (128th).

The findings demonstrate that when considering reform, governments need to look at all taxes paid by companies. Corporate income tax is only a part of the story, accounting for only 37 percent of the total tax rate, 26 percent of the number of hours spent on tax compliance, and 12 percent of the number of tax payments. Labor taxes and contributions add significantly to the tax cost in some countries and also to the compliance obligations.

“An inquiry into the amount of tax paid by the corporate sector must look beyond corporate income tax and take account of all business-related taxes borne and collected, in other words, the total tax contribution.

This is one of the findings of in-depth research conducted at the end of 2007 by PricewaterhouseCoopers (PwC) into how much tax large South African companies in fact pay, and how much tax (such as PAYE and VAT) they collect and remit to the South African Revenue Service (SARS). This is the first such study in South Africa, and the results will be of great interest to stakeholders such as National Treasury, SARS, the corporate sector, institutional investors, trade unions and others.

“The PwC study has corroborated what similar PwC studies of foreign countries have shown,” explains Charles de Wet, the PwC director responsible for the Total Tax Contribution project.

Key findings arising from the survey
“The factual data arising from the survey is being put into the public domain by PwC to facilitate an informed debate on the present and future shape of South Africa’s tax system as it affects large companies,” says De Wet. Key survey findings include:
In South Africa, the total number of taxes levied (and either borne by the companies or collected by them) is currently 21 after the abolition of Regional Services Council levies and Retirement Funds tax. Prior to 31 March 2007, this number was 23, which included 21 national taxes and two local taxes. By way of comparison, similar studies in the United Kingdom identified only 22 business taxes, while 56 taxes were identified in a study in Australia and 31 in the Netherlands.
In assessing the tax burden of the corporate sector, it is necessary to look further than corporate income tax and to take account of all business taxes borne by companies, and hence the aggregate of all taxes paid by companies, as well as the burden of collecting taxes on behalf of the fiscus.
The survey results corroborate the importance of large South African companies to government finances by way of taxes borne and collected. The 50 companies surveyed bore in aggregate R50.4 billion in taxes and collected a further R52 billion on behalf of government (national and local) in 2007. This represented 10.1 percent of government receipts in respect of taxes borne. In addition, 27.3 percent of the total corporate tax in 2007 and 31.9 percent of Secondary Tax on Companies (STC) was paid by these 50 companies.
On average, the companies surveyed reported paying 8.7 different business-related taxes.
An important issue highlighted by the PwC study is the importance to SARS (and to the corporate sector) of taxes collected by companies, though not borne by them, and paid over to SARS. These include PAYE, VAT and excise duties. On average the companies surveyed reported collecting 3.2 different taxes and paying them over to SARS.

Support for the survey
Michael Spicer, CEO of Business Leadership, an organisation whose members include South Africa’s largest corporations says, “Taxation and specifically corporate taxation is always an important and lively part of the economic debate between business, government and other stakeholders in market democracies. It is vital that such debate be underpinned by strong empirical research and evidence. Until this timely PwC report, such evidence has been lacking in South Africa and the quality of the debate on corporate taxation on all sides has suffered accordingly. Business Leadership is a body comprising the 65 largest South African and multinational companies invested in South Africa, from whose ranks the majority of respondents were drawn, and is delighted to have participated in this endeavour.”

De Wet confirmed that the purpose of undertaking this total tax contribution study was not to act as a lobby group for the corporate sector, nor to advocate specific tax reforms, but simply to elicit factual data to place in the public domain as the basis for an informed debate between all stakeholders.

Background
Around the world, large corporations are a vital source of revenue for the national tax authorities. But how much tax do these corporations really pay? Is tax taking an inordinately large slice of their profits? Are governments relentlessly increasing the number of taxes and increasing their overall tax take? Is big business being crushed by the expense of complying with tax legislation?

There is also a perception that large companies do not pay as much tax as they should. Again, such perceptions are seldom supported by empirical data and are frequently based on generalisations, speculation and innuendo.

In times past, aggressive tax avoidance by the corporate sector was regarded as within the rules of the game. In more recent years, the payment by a corporation of the tax properly due by it is increasingly being regarded as part of its corporate social responsibility, and as a corporate governance issue.

PricewaterhouseCoopers’ in Ireland has issued some golden rules for protecting business and wealth.

Ireland continues to be one of the fastest growing Euroland economies. The PricewaterhouseCoopers recent Economic Outlook projects Ireland’s GDP growth to be 3.5% for 2008. This slower pace of growth compared to recent years is reflective of more modest house prices, lower employment gains, tighter credit conditions and easing export demand. In light of this changing economic environment, it is even more important to manage business fundamentals and protect wealth, in order to secure continued future growth and success. According to PwC, the Four Golden Rules to protect business and wealth are:

• Get the paperwork right;
• Be prepared for a sale;
• Plan for succession;
• Minimise tax.

Speaking at the 2008 Checkout Conference, Teresa McColgan, Tax Partner, PwC Business and Wealth Services, said:

“In a changing commercial and economic environment a renewed focus on the wider business success drivers is needed. This includes standing back from the day to day operations to ensure that efficient business plans, including tax structuring, are in place to maximise future growth. For example, having a tax efficient Will, which is up to date, is critical. We see a greater emphasis on putting this kind of paperwork in place in order to minimise future tax leakage. Other areas for forward planning include: being prepared for a sale, which might involve isolating property assets and general asset reorganisation; having an appropriate business succession plan; and having plans in place to minimise tax when extracting value, ie property assets, cash, dividends or shares, from the business.

Continuing its 74-year association with the Academy Awards, PricewaterhouseCoopers LLP has announced that Brad Oltmanns and Rick Rosas will again lead the balloting process for the 80th Annual Academy Awards. Oltmanns and Rosas are the only two people in the world who will know the identity of the Oscar winners before the live telecast.

“PricewaterhouseCoopers ensures complete confidentiality and security in our voting process by counting every single ballot by hand,” said Sid Ganis, president, Academy of Motion Picture Arts and Sciences. “Trust, integrity and tradition are at the core of our relationship with PricewaterhouseCoopers.”