Promoting Growth in the Caribbean : Tax Incentives in Theory and in Practice

Promoting Growth in the Caribbean : Tax Incentives in Theory and in Practice

The recent international financial crisis dealt a hard blow to the region's growth prospects, being reflected in reduced demand for financial services and tourism as well as falling remittances. This was combined in some cases with home grown...

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Bibliographic Details
Main Authors:	Bes, Martin, Alvarez-Estrada, Daniel
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCELERATED DEPRECIATION ACCOUNTING ACCOUNTING FRAMEWORK ADMINISTRATIVE AUTONOMY AMOUNT OF CAPITAL ARREARS BAILOUTS BENEFICIARIES BUSINESS INVESTMENT CAPITAL FORMATION CAPITAL INTENSITY CAPITAL MOBILITY CORPORATE INCOME TAX CORPORATE INCOME TAXES CURRENCY DEBT DEBT LEVELS DEBTS DEFICITS DEVELOPING COUNTRIES DEVELOPMENT BANK DOMESTIC MARKET ECONOMIC DEVELOPMENTS ECONOMIC PERFORMANCE ECONOMIC POLICIES EMERGING ECONOMIES EMERGING MARKETS EPZ EXCISE TAXES EXPANSIONARY POLICIES EXPORT EXPORT PROCESSING ZONES EXPORTER EXPORTS FINANCIAL CONGLOMERATE FINANCIAL DEVELOPMENT FINANCIAL SECTOR FINANCIAL SERVICES FOOD PRICES FOREIGN DIRECT INVESTMENT GOVERNMENT SPENDING HUMAN CAPITAL HUMAN DEVELOPMENT INCOME TAX RATE INDIRECT TAXATION INSTRUMENT INTERNATIONAL BANK INTERNATIONAL COMPETITION INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCIAL CRISIS INTERNATIONAL TRADE INVESTMENT PROMOTION INVESTMENT TAX CREDIT JOB CREATION JUDGMENT LIVING STANDARDS MARKET FAILURES MIDDLE-INCOME COUNTRIES MONETARY FUND NATURAL DISASTERS NATURAL RESOURCES PAYROLL TAXES PERSONAL INCOME PERSONAL INCOME TAX POLICY RESPONSE POLITICAL SYSTEM PRIVATE INVESTMENT PROFITABILITY PUBLIC DEBT PUBLIC DISCLOSURE REMITTANCES SMALL COUNTRIES SOCIAL SECURITY TAXES SOLVENCY STATUTORY TAX SUNSET CLAUSE TAX TAX ADMINISTRATION TAX AVOIDANCE TAX BASE TAX BENEFITS TAX BREAKS TAX CODE TAX COLLECTION TAX COMPETITION TAX CONCESSIONS TAX CREDITS TAX EXPENDITURE TAX EXPENDITURES TAX HARMONIZATION TAX INCENTIVE TAX INCENTIVES TAX LIABILITIES TAX MEASURES TAX PLANNING TAX POLICY TAX RATE TAX RATES TAX RECEIPTS TAX RELIEF TAX RETURNS TAX REVENUE TAX REVENUES TAX SYSTEM TAX SYSTEMS TAX TREATMENT TAXPAYERS TECHNICAL ASSISTANCE TRADE BARRIERS TRADING TRANSFER PRICING TRANSITION ECONOMIES TRANSPARENCY VALUE ADDED TAX
Online Access:	http://documents.worldbank.org/curated/en/2013/06/17886462/promoting-growth-caribbean-tax-incentives-theory-practice http://hdl.handle.net/10986/16619

Description
Summary:	The recent international financial crisis dealt a hard blow to the region's growth prospects, being reflected in reduced demand for financial services and tourism as well as falling remittances. This was combined in some cases with home grown macroeconomic imbalances and the need to face the costs of financial sector bailouts in other countries. More recently, policymakers have indicated the need to explore the use of tax incentives in order to foster much needed private investment. This policy note analyzes the issues associated with the use of tax incentives and reviews the challenges faced by the region, which has had a not altogether successful experience in controlling tax expenditures. The policy note is organized as follows: the first section explores the diverse nature of the Caribbean and Latin American group of countries referred to in this note: the Bahamas, Barbados, Belize, Dominican Republic, Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago. This is followed by a word of caution regarding the emphasis on factor accumulation in explaining growth, dampening beforehand any unrealistic expectations regarding growth promoting tax incentives. A brief analytical review of the main direct and indirect tax instruments is included in section three. Section four discusses features of good tax incentive systems. Section five reviews some country experience with provision of tax relief. Last section gives a brief set of recommendations.

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