The Right Kind of Help? Tax Incentives for Staying Small

Benedek, Dóra; Deb, Pragyan; Gracia, Borja; Saksonovs, Sergejs; Shabunina, Anna; Budina, Nina T

doi:10.5089/9781484302552.001

Cited by 10 publications

(7 citation statements)

References 15 publications

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“…Specifically, size-based tax preferences can result in a "small business trap," creating disincentives for more productive firms to report their income correctly or grow beyond a certain sizetypically the small business tax threshold-and lose the benefits of tax preferences. This prevents them from achieving economies of scale, limiting opportunities for future growth (Benedek et al 2017). At the same time, market development can be hampered as investors would be satisfied with lower gross return on their investment due to the tax preference.…”

Section: Size-related Tax and Labor Regulations Can Affect Firm Produ...mentioning

confidence: 99%

Albania: Technical Assistance Report-Tax Policy Reform Options for the MTRS

2022

IMF Staff Country Reports

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23 B. Excises __________________________________________________________________________________________________30 C. Environmental Taxes and Other National Taxes ____________________________________________________ 32 Consumption TaxesVAT contributes about half of tax revenues, with a relatively high standard rate (20 percent), but its efficiency is low compared to others in the region. Excises and national taxes also deliver a large share of revenues. Both VAT and excise rules are in line with international standards, but a very broad range of goods, services and taxpayers are exempt from indirect taxes, undermining the efficiency of collection. The authorities' estimate on the revenue forgone through indirect tax exemptions, reduced rates, and other beneficial treatments is around 5.5 percent of GDP, but that comprises both the policy and compliance gaps.Within the VAT, a large share of final consumption is exempt, such as education, health, medicines and similar products, sale of new property, and financial services. Some of these exemptions are based on equity grounds, but this is an expensive and poorly-targeted means of support. The mission recommends that private education, health, non-prescription medicines and similar goods, as well as fee-based financial services and the first sale of newly-built property be subject to VAT.

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Section: Size-related Tax and Labor Regulations Can Affect Firm Produ...mentioning

confidence: 99%

Albania: Technical Assistance Report-Tax Policy Reform Options for the MTRS

2022

IMF Staff Country Reports

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“…6 Perhaps COVID-19 was a warning, of sorts, that we need to change direction; a message from 'Gaia', if you will. 7 In order to frame this opportunity provided by the pandemic to re-examine the priorities and purpose of MSME finance, and how to best go about achieving them, we have sought to adopt and convert the Japanese approach of ikigai (see figure 1). Ikigai relates to a means by which an individual can try to bring about a sense of fulfilment, and reason for being, from attaining a balance of variousand potentially competingforces, in order to create an optimal balance (Garcia and Mirelles, 2017).…”

Section: ░ 2 the Ikigai Of Msme Finance: A "New" Paradigmmentioning

confidence: 99%

Looking Beyond the Pandemic: Building Back Better for MSME Finance

Troilo

Abé

Freeman

2022

IJBMR

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This paper provides a conceptual overview of what a post-pandemic ecosystem for MSME financing might be, and how policymakers might apply it. Current COVID-19 emergency measures are not sustainable, and fintech and other technologies offer improvements for access to MSME finance worldwide. We offer a macro-perspective of how MSME financing might balance the competing interests of various stakeholders via the lens of ikigai. The Japanese term for fulfilment, and how fintech provides the “digital unlock” that has been missing to this point. We derive practical suggestions for policymakers from our theoretical framework, using real-world examples to transition from the abstract to the concrete.

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“…Nevertheless, support for young firms should remain temporary, as start-ups need to test the value of their business model. Indeed, incentives to remain small can hurt productivity (Benedek et al, 2017 Public authorities should promote more the need for specialised workers in R&D, as both the share of researchers in the workforce and of women in the research labour force is low by international standards (SERI, 2016). The quality of Swiss education is particularly high, but the share of the population with a higher education qualification is not, most likely because of the importance of vocational training (Vujanovic and Lewis, 2017).…”

Section: Government Support For Business Randd Is Lowmentioning

confidence: 99%