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 someti...

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Bibliographic Details
Main Authors:	Coolidge, Jacqueline, Yilmaz, Fatih
Format:	Brief
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	RESOURCES TURNOVER TAX TAX RESEARCH TRANSACTION LIABILITY BUSINESS EXPENSES GOOD ACCOUNTING PROFIT MARGINS ADDED TAX EXPENSES INTERNATIONAL TRADE SMALL ENTERPRISES TAX BURDENS COMPLIANCE COSTS TURNOVER TAX COMPLIANCE COSTS SALES INCOME RETURNS TAX REGIMES DEVELOPING COUNTRIES TRANSITION COUNTRIES INCOMES TAX SIMPLIFICATION TAX COMPLIANCE TAX RATES DISTRIBUTION COST TAX LIABILITY MARKET TAX FIXED RATES INCOME TAX BENEFICIARIES REPORTING BANK ACCOUNTS ADMINISTRATION RISK FACTORS AUDITS ENFORCEMENT TAXPAYER BOOKKEEPING TAXATION CENTRAL BANK SINGLE TAXES TRADE SMALL BUSINESS COMMUNICATIONS INTERNATIONAL FINANCE TAX ACCOUNTING PUBLIC POLICY BUSINESS INVESTMENT TAX AUDITS TAX SYSTEM POVERTY FINANCE CORPORATION TAXPAYERS TAX REGIME BUSINESS TAX TAX ADMINISTRATION OPTIONS REVENUE TAX POLICY PROFIT ACCOUNTING RULES ACCOUNTS CRITERIA TAX BASE AUDIT TAX RETURNS COMPLIANCE COST SMALL BUSINESSES ACCOUNT FINANCE TAXES COMPETITION MICROENTERPRISES
Online Access:	http://documents.worldbank.org/curated/en/2016/04/26159239/small-business-tax-regimes http://hdl.handle.net/10986/24250

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Summary:	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.

Small Business Tax Regimes

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