Project Design

Cairo Conference Session 3.2: Taxing Small Businesses - How Some Governments are Improving their Tax Laws (2005)

    The Papers and powerpoint presentations on the right hand side come from Session 3.2 on 30th November 2005 in Cairo, "Taxing Small Businesses - How Some Governments are Improving their Tax Laws". This Session focused on the impact that taxation systems and administration have on the small business sector, and on the kinds of reforms that are possible.

    Small businesses generally continue to view the tax system as an obstacle to business development and the overall tax burden as too high. This may partly be due to the fact that simplified regimes in many cases have been introduced in lieu of income tax only, so that small business operators continue to be confronted with a large number of tax obligations and high compliance costs.

    a) Taxation, Growth and Small Business Development: Experiences from Africa, by Richard Stern
    Richard Stern is responsible for Sub-Saharan Africa in the FIAS - World Bank Group in Washington DC. He reported on a comparative study recently undertaken in Sub-Sahara Africa (Rwanda, South Africa and Zambia) on the burden of tax on small enterprises. The findings show how taxation systems affect small businesses in each of these countries and point to conclusions on the ways these systems can be improved. Among other proposals, Richard suggested that a culture of compliance should be promoted, which is supported by education on basic business operations, accounting, and monitoring (e.g., simple turnover, low rate).

    b) Small Business Taxation in Transition Countries: No Easy Fixes, by Jackie Coolidge
    Jacqueline Coolidge is responsible for Admin Barrier Solutions in the FIAS - World Bank Group in Washington DC. She presented a report on SME taxation in Eastern Europe, which had been prepared by Michael Engelschalk (also with the World Bank Group in Washington DC). The Paper outlines the growth of the SME sector in the region and its impact on tax policy and tax administration. It then describes approaches chosen by different countries in the region to reduce the tax burden and compliance costs for SME. It shows that the design of a clear and reasonably fair simplified tax system is a task which has often been underestimated by ministries of finance and tax administrations.

    c) A Tax Administration's Perspective on Small Business Tax Regimes, by Moss Gondwe
    Moss Gondwe is the General Manager for Small Business in the South African Revenue Services in Pretoria. He responded to the two Papers outlined above, giving the perspective of a government official who is engaged in balancing the competing demands for reform.

    Associated Activities and Documents
    Synthesis documents
    »Donor Committee Conference: Reforming the Business Environment - from assessing problems to measuring results, Cairo, 29 November to 1 December 2005