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UK business leaders view the tax regime as the most important area of regulation that the government could potentially improve.

Yet when it comes to convergence of global tax and regulatory frameworks UK CEOs, more than any of their counterparts globally, do not want the government to harmonise critical elements of the regulatory regime.

UK regulatory burden 

Only one in four UK CEOs in the PricewaterhouseCoopers 11th Annual Global CEO survey favour the idea that government should drive the convergence of global tax and regulatory systems, compared to over half (53 per cent) of the 1,150 CEOs surveyed.

Almost all (91 per cent) UK CEOs do not believe that the UK regulatory burden has decreased, despite positive signs from the government about its commitment to simplify the UK tax system.

Richard Collier-Keywood, UK head of tax, PricewaterhouseCoopers LLP, said it was not surprising that UK CEOs wanted to maintain some sovereignty in the tax system.

“Clearly they are wary of convergence of international tax systems, no doubt fearing this would lead to more complexity, uncertainty and time being spent on dealing with red tape,” he added.

More than 70 per cent of CEOs in Italy, Brazil, India, Germany and Russia favour convergence while 17 per cent, globally, oppose it.

Top five areas for improvement

According to UK CEOs, the tax regime (26 per cent), labour laws (20 per cent), planning laws (12 per cent), healthcare (12 per cent) and education (9 per cent) are the top five areas for potential regulatory improvement.

The CEOs from five of the largest 15 countries in the survey also rank taxation as the main area they would most like to see their governments improve: Brazil (40 per cent), Canada (37 per cent), Italy (31 per cent), Russia (20 per cent) and Australia (23 per cent).

Very few CEOs believe that their governments are creating a business friendly environment. Only 26 per cent of CEOs around the world believe that their governments are supportive while 34 per cent are either undecided or prefer not to disclose their views.

Indian CEOs (54 per cent) are most likely to endorse their government for its business friendly measures, whereas Italian (81 per cent), Korean (67 per cent), UK (66 per cent) and Brazilian (60 per cent) CEOs are the most critical.

Only 18 per cent of all CEOs think that their governments have lightened the regulatory burden for business.

Asian CEOs are much more positive, however, with 59 per cent of those based in Japan and 53 per cent of those based in India believing that the regulatory burden has declined.

CEOs in the UK (91 per cent), Italy (84 per cent) and Brazil (83 per cent), by contrast, disagree that the burden has shrunk.

Stimulating innovation 

Conclusions reached in the Paying Taxes study by the World Bank and PricewaterhouseCoopers suggest that there can be a mutually beneficial opportunity if government simplifies tax systems, eases the compliance cost on business, and reduces tax rates.

CEOs appear doubtful that government supports business in stimulating innovation. Globally, 41 per cent do not agree that governments help promote innovation.

Italian (79 per cent), UK (62 per cent), Brazilian (60 per cent) and Indian (60 per cent) CEOs are the most doubtful.

Only 28 per cent of all CEOs, rising to 40 per cent in Korea and France and 43 per cent in Japan believe that their governments nurture innovation.

There is almost an even divide about whether the regulatory framework is designed on the assumption that companies will act without integrity.

Globally, 29 per cent of CEOs think that governments’ regulatory frameworks assume companies will act in a completely self-interested manner.

Korean (57 per cent) and Russian (56 per cent) CEOs are particularly likely to take this view. Thirty-eight per cent of CEOs in the UK do not believe, however, that governments make such cynical prejudgements.

French (65 per cent) and Italian (59 per cent) CEOs disagree most strongly that the regulatory framework is designed with potential wrongdoers in mind.