Preferential tax regimes for MSMEs operational aspects, impact evidence and policy implications

Marco. Marchese

ILO Working Papers from International Labour Organization

Abstract: Drawing on a literature review, this paper looks at the role that preferential tax regimes (PTRs) for micro, small and medium enterprises (MSMEs) play in encouraging enterprise formalization and enterprise growth. The main focus is on emerging economies, notably from Latin America, where this policy has been more widely used and assessed. The first section of the paper introduces some general principles in small busi- ness income taxation which help set the context of PTRs for MSMEs. The second section explains the main reasons in favour and against PTRs for MSMEs. The third section introduces a typology of PTRs for MSMEs, focusing on the operational aspects of the two most relevant types in emerging economies: presumptive regimes and small business tax rates. The fourth section discusses the existing empirical evidence on the impact of presumptive regimes on enterprise formalization, enterprise growth and so-called “threshold ef- fects” (when companies avoid growing not to lose preferential taxation). The fifth section draws the main policy messages, while conclusions summarise and put forward some future research ideas.

Keywords: small enterprise; taxation; informal economy (search for similar items in EconPapers)
Pages: 1 online resource (35 p.) pages
Date: 2021
New Economics Papers: this item is included in nep-ent
References: Add references at CitEc
Citations:

Published in ILO working paper series

Downloads: (external link)
https://ilo.userservices.exlibrisgroup.com/view/de ... NST/1280579240002676 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ilo:ilowps:995132091402676

Access Statistics for this paper

More papers in ILO Working Papers from International Labour Organization Contact information at EDIRC.
Bibliographic data for series maintained by Vesa Sivunen ().