The ranking could drop should Ottawa implement the proposed legislative changes for private corporations

Canada ranks first among the G7 countries for the ease of paying taxes and low total tax burden for small- to medium-sized companies, according to the 12th edition of the Paying Taxes report released by PricewaterhouseCoopers LLP (PwC) and the World Bank Group.

Canada ranks first with the G7, and 16th overall (out of all 190 countries) in terms of the efficiency of the tax system, the report says.

For example, small- to medium-sized Canadian companies make an average of eight tax payments per year, compared with an average of 24 payments globally, the report says, and companies in Canada devote an average of 131 hours to tax compliance each year, compared with the global average of 240 hours.

However, the report warns that this performance could deteriorate if the federal government goes ahead with proposed legislative changes for private corporations. Under the planned changes, the total tax burden would increase, and tax compliance would become more complex, the report says.

Read: Feds provide more details on revisions to small business tax proposals

“The Canadian tax system is a critical component of our Canadian investment climate. The recent proposals for private corporations by the government will increase the amount of taxes small and medium-sized businesses will have to pay, diverting money away from future investments and job creation,” says Peter van Dijk, national tax policy leader at PwC, in a statement.