Investment climate reform in tajikistan

Buryy V., Morford Z, Snider P. (2002); Business Start-up & One-Stop-Shops: Principles 

for Success from Ukraine and Abroad; BIZPRO Project, USAID; 

http://pdf.usaid.gov/

pdf_docs/Pnacr087.pdf

 (last accessed 29 November 2018).

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15

Fiscal policy

Box 8: 

Tax policy for recently created 

micro and small enterprises

Tax policies introducing measures that benefit micro 

and small enterprises or specific economic sectors 

can have a positive impact on women-led businesses 

in particular, as a result of women’s predominance in 

this segment. Such tax policies might also incentivise 

women entrepreneurs to register their businesses, 

given they are more likely than their male counterparts 

to operate in the informal sector. 

Mexico provides an interesting example of a tax regime 

for “small taxpayers”, which offers lower personal, social 

security, VAT and excise tax obligations during the first 10 

years of operation. In addition to significantly reducing 

the amount of tax paid, the scheme is designed to reduce 

the administrative burden associated with calculating the 

businesses’ VAT and excise tax obligations. The concessions 

reduce progressively over the 10-year period. Companies 

wishing to participate in the scheme enrol in the Federal 

Taxpayer Registry (RFC).

In other countries such as the Netherlands, unincorporated 

SMEs can obtain a fixed deduction as well as benefit from a 

scheme, which exempts 14 per cent of their profits, thereby 

effectively reducing the amount of tax paid.

Box 9: 

Reducing the cost of 

compliance

Identifying ways to reduce the amount of time 

and human resources needed to comply with tax 

regulations can have a positive impact on small 

businesses, particularly women-led businesses, which 

tend to be smaller and operate with fewer resources 

than men-led businesses. Simplifying processes and 

reducing the amount of information needed can reduce 

the time women entrepreneurs dedicate to compliance 

functions and allow them to spend it on income-

generating activities instead.

The government of Mexico (see previous example) has 

also developed an online tool to facilitate tax compliance, 

and provides registered businesses with a range of other 

support services and access to finance. Simplified VAT 

remittance calculation schemes reduce the administrative 

burden of compliance. 

The United Kingdom has made use of a flat-rate scheme 

for businesses whose taxable turnover is expected to fall 

below a specified threshold. 

Instead of requiring monthly filing of VAT returns, some 

countries permit smaller companies to do this quarterly 

(Spain, Poland, Belgium), every six months (Denmark) or 

even annually (Canada). This both reduces the burden of 

compliance and gives businesses more time to pay. 

Simplified financial accounting for small firms is widespread 

in OECD countries. In Austria, small businesses under 

a certain threshold only need to report on revenues and 

expenditures; Belgium introduced simplified accounting 

rules based on a treasury book, selling book, purchase book 

and annual inventory; in Poland, unincorporated entities 

only need to keep a tax book of revenue and expenses.

Sources: OECD (2015); Tax Policy Studies – Taxation of SMEs in OECD countries 

OECD (2009) Tax Policy Studies – Taxation of SMEs Key Issues and Policy 

Considerations

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EBRD

 | A toolkit for policymakers and advocates

16

Access to finance