Reforming Business Taxes : What is the Effect on Private Sector Development?

Tax rates and the administrative costs of tax compliance are key concerns of business. Studies within and across countries suggest that lowering corporate tax rates can increase investment, reduce tax evasion by formal firms, promote the creation o...

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Bibliographic Details
Main Author:	Bruhn, Miriam
Format:	Viewpoint
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING AFFILIATED ORGANIZATIONS ANNUAL SALES BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS TAX BUSINESS TAXES CAPITAL INVESTMENT CAPITAL TAXES CONSUMPTION TAXES CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATE CORPORATE TAX RATES CORPORATE TAXES CURRENCY DEDUCTIONS DEREGULATION DEVELOPING COUNTRIES DIVIDEND DIVIDEND TAX DOMESTIC INVESTMENT ECONOMIC PERFORMANCE EFFECTIVE TAX RATES EXPORT EXPORTERS EXPORTS FEDERAL TAX FINANCE CORPORATION FIRM PERFORMANCE FISCAL POLICY FOREIGN DIRECT INVESTMENT GOVERNMENT REVENUE IMPLICIT TAX INCOME TAX RATE INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INVESTMENT CLIMATE INVESTMENT DECISIONS MONETARY FUND PAYROLL TAXES PERSONAL INCOME PERSONAL INCOME TAXES POLITICAL ECONOMY PRIVATE SECTOR DEVELOPMENT PUBLIC FINANCE PUBLIC POLICY PUBLIC POLICY INNOVATIONS REGULATORY BURDEN RETURN RETURN ON INVESTMENTS SALES GROWTH SALES TAX SMALL BUSINESSES STATUTORY TAX STATUTORY TAX RATE STATUTORY TAX RATES TAX TAX ADMINISTRATION TAX BENEFITS TAX CODE TAX COMPLIANCE TAX COMPLIANCE COSTS TAX CONCESSIONS TAX EVASION TAX INCENTIVE TAX INCENTIVES TAX LIABILITY TAX PAYMENT TAX PAYMENTS TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REFORMS TAX REGIME TAX SIMPLIFICATION TAX STRUCTURE TAX SYSTEM TAXATION TAXPAYER TAXPAYER COMPLIANCE TRANSITION COUNTRIES VALUE ADDED TAX WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2011/12/16198906/reforming-business-taxes-effect-private-sector-development http://hdl.handle.net/10986/11053

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Summary:	Tax rates and the administrative costs of tax compliance are key concerns of business. Studies within and across countries suggest that lowering corporate tax rates can increase investment, reduce tax evasion by formal firms, promote the creation of formal firms, and ultimately raise sales and Gross Domestic Product (GDP). These benefits, however, need to be balanced against other objectives of the tax regime. Although less is known about the effects of reducing compliance costs, evidence suggests that this too can lead to more formal firms and higher sales.

Reforming Business Taxes : What is the Effect on Private Sector Development?

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