Businesses of all sizes have several financial and economic components to contend with to make their operations run smoothly. However, the most critical concern most business owners address that causes the most headaches is the complicated tax code.
A study conducted by Alvarex & Marsal Taxand reveals that most chief financial officers believe uncertainty regarding U.S. tax law
has become more pressing than a reduction in corporate tax rates. When asked which element of the tax code they would change, 37 percent of CFOs said they would eliminate uncertainty.
“For companies to plan, to invest, to create jobs and to grow, they must have certainty,” said Robert Lowe, CEO of A&M Taxand. “In fact, confidence in knowing precisely what the tax code will require has become more important than how much it will cost them. As our research reveals, as long as proposed changes remain up in the air, companies will be forced to continue to burn fuel operating in holding patterns rather than charting productive courses forward.”
According to the study, 90 percent of business executives with corporate holdings of $1 billion or more take tax considerations into account when making business decisions. Seventy-seven percent of financial professionals at smaller companies gave the same response.
A separate study, “The Economic Burden Caused by Tax Code Complexity,” conducted by the Laffner Center, businesses spent $2.94 billion complying with the business income tax code in 2011, which includes the costs of retaining accountants, attorneys and tax professionals to ensure they follow tax law guidelines. The study’s authors also noted that this figure does not include the cost of audits, which may represent the highest costs of all.