Options for Low Income Countries Effective and Efficient Use of Tax Incentives for Investment : A Report to the G-20 Development Working Group by the IMF, OECD, UN and World Bank
Experience shows that there is often ample room for more effective and efficient use of investment tax incentives in low-income countries. Tax incentives generally rank low in investment climate surveys in low-income countries, and there are many e...
| Main Authors: | , , , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/11/25251593/options-low-income-countries-effective-efficient-use-tax-incentives-investment-report-g-20-development-working-group-imf-oecd-un-world-bank http://hdl.handle.net/10986/22923 |
| Summary: | Experience shows that there is often
ample room for more effective and efficient use of
investment tax incentives in low-income countries. Tax
incentives generally rank low in investment climate surveys
in low-income countries, and there are many examples in
which they are reported to be redundant, that is, investment
will have been undertaken even without them. And their
fiscal cost can be high, reducing opportunities for
much-needed public spending on infrastructure, public
services or social support, or requiring higher taxes on
other activities. This paper responds to a request of the
G20 Development Working Group for an exploration of options
for low-income countries’ effective and efficient use of tax
incentives for investment. To that end, it develops
principles for the design and governance of tax incentives
and provides guidance on good practices in these areas.
Since much of the pressure to offer incentives stems from an
awareness of those offered by other countries, the paper
also discusses options for international coordination to
address the risk of mutually damaging spillovers from such
tax competition. Finally, a separate background document
develops practical tools and models that can help assess the
costs and benefits of tax incentives, which is essential for
informed decision making. The aim is thus to assist
low-income countries (LICs) in reviewing and reforming their
tax incentives, so as to better align them with their
developmental objectives. This paper relates to other global
initiatives aimed at strengthening domestic revenue
mobilization in LICs. |
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