Publication: Small Business Tax Regimes
Simplified tax regimes for micro and small enterprises in developing countries are intended to facilitate voluntary tax compliance. However, survey evidence suggests that small business taxation based on simplified bookkeeping or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels. Very simple fixed tax regimes not requiring any books or records tend to be overly popular but prone to abuse. System reforms will require more precise tailoring of the simplified regimes to their target beneficiaries, coupled with strong compliance management to detect and deter abuse. The overall objective of simplified taxation for micro and small enterprises (MSEs) in developing countries is generally to facilitate voluntary tax compliance and remove obstacles in moving toward business formalization and growth.
“Coolidge, Jacqueline; Yilmaz, Fatih. 2016. Small Business Tax Regimes. Viewpoint;No. 349. © World Bank, Washington, DC. http://hdl.handle.net/10986/24250 License: CC BY 3.0 IGO.”
Other publications in this report series
PublicationPrivate Participation in the Airport Sector : Recent Trends(World Bank, Washington, DC, 1999-11)During the 1990s private sponsors have participated in projects involving eighty-nine airports in twenty-three developing countries, with investment totaling US$5.4 billion. About three-fifths of this investment was carried out in 1998 alone, and about two-fifths related to the award of the Argentine airport system that year. Analysis of the investment patterns shows that Latin America leads in attracting private investors, operations and management contracts with major capital expenditure have been the main vehicle for investment, and governments are transferring networks to the private sector more often than single airports or stand-alone facilities.
PublicationInternational Power Trade : The Nordic Power Pool(World Bank, Washington, DC, 1999-01)Scandinavia, where countries have traded power for decades, has the world's most developed international market for electricity. Recently the trading system has changed dramatically, moving from the old model of cooperation among the leading vertically integrated utilities in each country, under the Nordel agreement, to competitive market rules. Norway and Sweden established a common power market, Nord Pool, in 1996, and Finland joined in June 1998. This Note examines why Nord Pool came into being, what conditions facilitated its development, and what lessons it provides for World Bank client countries.
PublicationCorporate Debt Restructuring-A Proposal for East Asia : Auctions Speak Louder than Words(World Bank, Washington, DC, 1999-11)Auctions may be an appropriate way to reorganize the liabilities of some overindebted East Asian firms - those that are generally well run, for which there is merit in keeping the existing owners in place, but for which conventional bankruptcy procedures are proving too slow. This Note proposes an auction scheme dubbed Accord - for Auction-based Creditor Ordering by Reducing Debts. Firms pay creditors in sequence as their operating cash flows permit rather than on a promised schedule. Creditors bid for position in the queue by the proportion of debt they forgive, choosing between smaller or more deferred repayments. The outcome: a firm with serviceable debt, controlled by existing owners with an incentive to operate it efficiently.
PublicationBanking on Governance? Conflicts of Interest Facing Bank Owners and Supervisors(World Bank, Washington, DC, 1999-10)Banks fail with alarming frequency, resulting in large losses of taxpayer money. A key factor in the high failure rate is the flawed governance mechanism, which exacerbates the risks inherent in banking. Bankers control a lot of other people's money and have much discretion over the information they disclose. The temptation to engage in excessive risk taking is strong. Tightening banking supervision is seldom the solution. For their part, banking supervisors often face incentives at odds with those of taxpayers. At times they may prefer not to act to minimize taxpayer losses. These twin governance problems are further compounded by the common practice of disclosing banking information only to supervisors, not to markets. This Note explains the conflicts and proposes some solutions.
PublicationMitigating Currency Convertibility Risks in High-Risk Countries : A New IDA Lending Approach(World Bank, Washington, DC, 1999-04)A proposed Currency Convertibility Fund, backstopped by a contingent credit from the International Development Association (IDA)-the World Bank's concessionary window for the world's poorest countries-has been designed for the Songo Songo Gas Development and Power Generation Project in Tanzania. The fund is a transitional mechanism aimed at supporting the Tanzanian government's efforts to attract foreign equity in circumstances where the private sector perceives a high level of risk and is otherwise unwilling to invest. The fund may be a replicable mechanism that, by mitigating sovereign risks that investors are unwilling to bear and unable to hedge against, could help catalyze foreign equity investment in other IDA countries and in projects that generate local currency.