Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations

Developing countries are increasingly offering tax breaks to attract investors and pursue various policy objectives such as encouraging investments in research and development (R and D) and increasing exports. Such incentives, however, can be very...

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Main Authors:	Kronfol, Hania, Steenbergen, Victor
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	TAXATION TAX INCENTIVE SUBSIDY CORPORATE TAX INVESTMENT CLIMATE INVESTMENT INCENTIVES
Online Access:	http://documents.worldbank.org/curated/en/180341583476704729/Evaluating-the-Costs-and-Benefits-of-Corporate-Tax-Incentives-Methodological-Approaches-and-Policy-Considerations http://hdl.handle.net/10986/33433

id	okr-10986-33433
recordtype	oai_dc
spelling	okr-10986-334332021-05-25T10:54:41Z Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations Kronfol, Hania Steenbergen, Victor TAXATION TAX INCENTIVE SUBSIDY CORPORATE TAX INVESTMENT CLIMATE INVESTMENT INCENTIVES Developing countries are increasingly offering tax breaks to attract investors and pursue various policy objectives such as encouraging investments in research and development (R and D) and increasing exports. Such incentives, however, can be very costly to governments. Too often, developing countries - already struggling with revenue mobilization - adopt investment incentives in an ad hoc manner, without analyzing the value for money of these instruments. Cost-benefit analysis can help policy makers demonstrate the direct cost (tax revenue foregone) incurred by governments against the economic benefits being pursued. Global evidence on investment location decisions suggests that while tax incentives can help attract investment, other factors, such as the wider investment climate and market opportunities, matter most. Tax incentives should therefore be conceived as part of a country’s broader investment policy framework and governments should be realistic about the potential impact any measure may have. In this light, cost-benefit analysis can serve as a powerful tool to inform incentives policy reform and offer important inputs into a country’s investment policy strategy. 2020-03-16T16:20:47Z 2020-03-16T16:20:47Z 2020 Brief http://documents.worldbank.org/curated/en/180341583476704729/Evaluating-the-Costs-and-Benefits-of-Corporate-Tax-Incentives-Methodological-Approaches-and-Policy-Considerations http://hdl.handle.net/10986/33433 English Finance, Competitiveness and Innovation in Focus; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	TAXATION TAX INCENTIVE SUBSIDY CORPORATE TAX INVESTMENT CLIMATE INVESTMENT INCENTIVES
spellingShingle	TAXATION TAX INCENTIVE SUBSIDY CORPORATE TAX INVESTMENT CLIMATE INVESTMENT INCENTIVES Kronfol, Hania Steenbergen, Victor Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
relation	Finance, Competitiveness and Innovation in Focus;
description	Developing countries are increasingly offering tax breaks to attract investors and pursue various policy objectives such as encouraging investments in research and development (R and D) and increasing exports. Such incentives, however, can be very costly to governments. Too often, developing countries - already struggling with revenue mobilization - adopt investment incentives in an ad hoc manner, without analyzing the value for money of these instruments. Cost-benefit analysis can help policy makers demonstrate the direct cost (tax revenue foregone) incurred by governments against the economic benefits being pursued. Global evidence on investment location decisions suggests that while tax incentives can help attract investment, other factors, such as the wider investment climate and market opportunities, matter most. Tax incentives should therefore be conceived as part of a country’s broader investment policy framework and governments should be realistic about the potential impact any measure may have. In this light, cost-benefit analysis can serve as a powerful tool to inform incentives policy reform and offer important inputs into a country’s investment policy strategy.
format	Brief
author	Kronfol, Hania Steenbergen, Victor
author_facet	Kronfol, Hania Steenbergen, Victor
author_sort	Kronfol, Hania
title	Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
title_short	Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
title_full	Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
title_fullStr	Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
title_full_unstemmed	Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations
title_sort	evaluating the costs and benefits of corporate tax incentives : methodological approaches and policy considerations
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/180341583476704729/Evaluating-the-Costs-and-Benefits-of-Corporate-Tax-Incentives-Methodological-Approaches-and-Policy-Considerations http://hdl.handle.net/10986/33433
_version_	1764478751452692480

Evaluating the Costs and Benefits of Corporate Tax Incentives : Methodological Approaches and Policy Considerations

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