Helping Firms Realize the Benefits of (Partial) Formalization

Developing country governments seek to reduce pervasive informality of firms for multiple reasons: increasing the tax base, helping firms access formal markets and grow, increasing rule of law, and as a means of obtaining data that can be used for...

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Main Authors:	Campos, Francisco, Goldstein, Markus, McKenzie, David
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	INFORMALITY TAX REGISTRATION ACCESS TO FINANCE BUSINESS ENVIRONMENT BUSINESS REGISTRATION
Online Access:	http://documents.worldbank.org/curated/en/511561539287441679/Helping-Firms-Realize-the-Benefits-of-Partial-Formalization http://hdl.handle.net/10986/30590

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recordtype	oai_dc
spelling	okr-10986-305902021-05-25T10:54:43Z Helping Firms Realize the Benefits of (Partial) Formalization Campos, Francisco Goldstein, Markus McKenzie, David INFORMALITY TAX REGISTRATION ACCESS TO FINANCE BUSINESS ENVIRONMENT BUSINESS REGISTRATION Developing country governments seek to reduce pervasive informality of firms for multiple reasons: increasing the tax base, helping firms access formal markets and grow, increasing rule of law, and as a means of obtaining data that can be used for other government functions. The most common approach towards achieving these aims has been to make it easier for firms to formalize, most notably by setting up one-stop shops where firms can register as a legal entity and for tax purposes all at once. But past experiments have showed very few informal firms choose to formalize even after such reforms, and that many of those who do fail to see any benefits on financial access or firm growth. An alternative approach, used in much of Africa, is to separate the process of business registration from tax registration. Getting firms to register legally may help governments reduce informality and achieve some of the aims above, even if it does not raise more taxes. But the question is then whether firms are interested in even this more limited form of formalization, and whether they see any benefits from using it. 2018-10-23T18:09:29Z 2018-10-23T18:09:29Z 2018-10 Brief http://documents.worldbank.org/curated/en/511561539287441679/Helping-Firms-Realize-the-Benefits-of-Partial-Formalization http://hdl.handle.net/10986/30590 English Finance & PSD Impact;No. 52 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief Africa Malawi
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	INFORMALITY TAX REGISTRATION ACCESS TO FINANCE BUSINESS ENVIRONMENT BUSINESS REGISTRATION
spellingShingle	INFORMALITY TAX REGISTRATION ACCESS TO FINANCE BUSINESS ENVIRONMENT BUSINESS REGISTRATION Campos, Francisco Goldstein, Markus McKenzie, David Helping Firms Realize the Benefits of (Partial) Formalization
geographic_facet	Africa Malawi
relation	Finance & PSD Impact;No. 52
description	Developing country governments seek to reduce pervasive informality of firms for multiple reasons: increasing the tax base, helping firms access formal markets and grow, increasing rule of law, and as a means of obtaining data that can be used for other government functions. The most common approach towards achieving these aims has been to make it easier for firms to formalize, most notably by setting up one-stop shops where firms can register as a legal entity and for tax purposes all at once. But past experiments have showed very few informal firms choose to formalize even after such reforms, and that many of those who do fail to see any benefits on financial access or firm growth. An alternative approach, used in much of Africa, is to separate the process of business registration from tax registration. Getting firms to register legally may help governments reduce informality and achieve some of the aims above, even if it does not raise more taxes. But the question is then whether firms are interested in even this more limited form of formalization, and whether they see any benefits from using it.
format	Brief
author	Campos, Francisco Goldstein, Markus McKenzie, David
author_facet	Campos, Francisco Goldstein, Markus McKenzie, David
author_sort	Campos, Francisco
title	Helping Firms Realize the Benefits of (Partial) Formalization
title_short	Helping Firms Realize the Benefits of (Partial) Formalization
title_full	Helping Firms Realize the Benefits of (Partial) Formalization
title_fullStr	Helping Firms Realize the Benefits of (Partial) Formalization
title_full_unstemmed	Helping Firms Realize the Benefits of (Partial) Formalization
title_sort	helping firms realize the benefits of (partial) formalization
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/511561539287441679/Helping-Firms-Realize-the-Benefits-of-Partial-Formalization http://hdl.handle.net/10986/30590
_version_	1764472444636102656

Helping Firms Realize the Benefits of (Partial) Formalization

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