Canada’s business tax system is complex and costly, challenging the country’s ability to compete internationally, according to a a new study by PricewaterhouseCoopers (PwC).

The 2007 Total Tax Contribution survey is based on a framework developed by PwC in the United Kingdom and encompasses all taxes paid by a company as well as all taxes collected by the company from its employees and customers on behalf of governments. A company’s total tax contribution is therefore a measure of its total impact on government revenues.

The survey found that companies in Canada are subject to 49 different taxes and 18 other payments to governments at the federal, provincial and municipal level. Adding to the complexity of Canada’s tax system, companies are subject to more than 200 possible “taxing points” — the number of tax obligations a business would be required to fulfill if it were subject to all taxes in all jurisdictions.

On average, the companies that took part in the survey spent $2.1 million a year to comply with these taxes. The average time spent on compliance was 19,863 hours, which translates to 2,483 eight-hour days or the equivalent of 11 full-time employees dealing solely with tax compliance.

According to the survey, the tax burden on companies in Canada is significantly higher than the burden on businesses in the United Kingdom. UK companies pay or collect 21 different taxes, fewer than half the number of taxes encountered by companies in Canada.

“While recent tax reforms have produced real savings for many corporations, the tax landscape in Canada still presents numerous challenges,” says Tom O’Brien, a tax partner with PwC in Canada.

According to the survey, a relatively small number of companies contribute the largest proportion of the total taxes borne and collected. The companies responsible for the 10 largest tax contributions in the survey (a quarter of the respondents) contributed 64% of the taxes borne and 68% of the taxes collected in 2006.

For more information and a copy of the survey, visit www.pwc.com/ca/ttc.