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A little handbook that could help bring big results – in revenues and investor certainty

Jan Loeprick's picture
Graphic: Boris Balabanov

In today’s globalized world, a corporation might have a retail store in one country, a factory in another, and financial services provider in yet a third.

Corporate interconnectedness has brought investment and growth, to be sure, but it has also added complexity to the work of tax authorities. Increasingly, developing-economy governments come face-to-face with corporations that employ sophisticated strategies with the aim of paying fewer taxes. With our recently published handbook, "Transfer Pricing and Developing Economies: A Handbook for Policy Makers and Practitioners,” we hope to support efforts to protect countries’ corporate tax bases.

Understanding bureaucracy

Zahid Hasnain's picture

Editor's note: This blog post is part of a series for the 'Bureaucracy Lab', a World Bank initiative to better understand the world's public officials.

Photo: © Gennadiy Ratushenko / World Bank

State capacity is clearly fundamental to development, and the motivation and productivity of the personnel working in the state is clearly fundamental to state capacity.

Government bureaucracies typically employ 15 to 30 percent of all workers, and 50 to 60 percent of formal sector or salaried workers in developing countries. This fact alone warrants a detailed understanding of the functioning of public sector labor markets and their influence on the broader labor market, particularly as the characteristics of public sector workers—their gender, age, and skills profiles, for instance—can be quite different from their private sector counterparts.

But more importantly, the motivation of government workers and thereby the productivity of government bureaucracies impacts almost everything else in an economy, from business regulations, to infrastructure provision, to the delivery of services.

Value for money: Costing Open Government reforms

Daniel Nogueira-Budny's picture

How can governments ensure that they get their money’s worth when they embrace open government reforms?
Ongoing research suggests that open government reforms—those that promote transparency, participation, and accountability—may lead to better development outcomes if properly implemented by governments. However, governments must navigate the myriad of initiative options as they strive to improve citizens’ quality of life and achieve the ambitious Sustainable Development Goals (SDGs). Without a rough idea of the potential costs and benefits different reforms might offer, how can governments allocate their resources efficiently?
Multiple stakeholders are collaborating to answer this question. The Research Consortium on the Impact of Open Government commissioned a study to determine the financial costs associated with particular open government initiatives.  

Higher revenue, easier filing for taxpayers in Armenia

Julia Oliver's picture

Photo credit: Dmitry Karyshev

Armenia was faced with a slowing economy, sinking remittances, and inefficient tax administration. At the same time, ordinary taxpayers had to navigate arduous processes when paying taxes. The Armenian government was eager to reform its tax administration. Below is a transcript of what we learned when we spoke to World Bank experts working with Armenian tax officials to make things better.
Julia: I’m Julia Oliver.
Maximilian: I’m Maximilian Mareis.
Julia: And we have been talking with tax experts around the World Bank to find out about what they do.
Maximilian: So, let’s start with this project in Armenia. Why did we get involved?

Julia: Well, the global financial crisis hit Armenia and its three million people pretty hard. In 2012, when the World Bank began working with policymakers to improve the country’s tax administration, the country faced a pretty bleak picture. Foreign remittances were low, and the domestic economy was slowing. In addition the country had high levels of informal employment.

Is public procurement a rich country’s policy?

Simeon Djankov's picture
Kazakhstan. Photo: Kubat Sydykov / World Bank

How large is the share of public procurement to GDP in middle-income and low-income countries and how it is evolving? If sizable, can public procurement be used as a policy tool to make markets more competitive, and thus improve the quality of government services? Can it be used to induce innovation in firms? Can it also be a significant way to reduce corruption?

Successful procurement is not just a set of activities, it is a strategy

Elmas Arisoy's picture
 Ho Chi Minh City, Vietnam. Photo: Tran Viet Duc / World Bank

Many Bank-financed projects, especially those implementing large and complex contracts continually face high risk of implementation delays, and procurement is the most frequently used scapegoat.

What has gone wrong in those cases?

At the onset, borrowers are requested to prepare a detailed procurement plan for the first 18 months of project implementation, which is carefully reviewed and approved by the Bank before loan negotiations and the projects are then declared "good to go."
But the reality is almost never that rosy.

Tax treaties: Boost or bane for development?

Jim Brumby's picture
  Tax treaties are like a bathtub; a single leaky one is a drain on a country’s revenues.  Photo: Kris Schroeder 

Tax officials and experts grappled with the issue of tax treaties several weeks ago at the IMF-World Bank Annual Meetings. This arcane subject has now emerged as a new lightning rod in the debate on fairness in international taxation. As citizens demand that corporations pay their fair share of taxes and some governments struggle to raise enough revenues for basic services, tax treaties present difficult issues.

Strengthening governance through the World Bank’s Fund for the 77 poorest countries

Deborah Wetzel's picture
Photo credit: Graham Crouch/World Bank

In my blog “The Governance Gap – can we bridge it?”, I stressed that strengthened institutions and improved governance are especially critical for the world’s most vulnerable countries in IDA, the World Bank’s Fund for the 77 poorest countries.

IDA is the single largest source of funds for basic social services for these governments and every three years, members representing IDA’s 173 donor and borrowing member countries meet to replenish its resources and refine its priorities.

The Governance Gap: Can we bridge it?

Deborah Wetzel's picture
Graphic by Nicholas Nam/World Bank

If you’re like me, just watching TV or picking up the paper is a constant reminder of issues related to “governance,” and that’s not just because it’s also my job.
People are not happy with the state of their governments these days. Distrust is running high; fiscal pressures are mounting; service delivery doesn’t reach the poorest people; corruption scandals abound and conflict seems on the rise.
The World Bank’s latest country surveys that polled around 9,000 opinion leaders in 40 of our client countries says that public sector governance has risen to the top of countries’ policy priorities. The 2016 Edelman Trust Barometer shows that more than half of the global population expresses distrust in government institutions.

Five tools for capturing, manipulating, and visualizing data

Daniel Nogueira-Budny's picture
Data Literacy Bootcamp in Freetown, Sierra Leone. Photo: Usman Khaliq, iDT Labs

Increasing evidence suggests that, to improve accountability and promote evidence-based decision making, open access to data and data literacy skills are essential. While in-person educational opportunities can be limited in parts of the developing world, free educational tools are available online to boost data literacy skills.
In June 2016, Code for Africa, with support from the World Bank’s Open Government Global Solutions Group, held a Data Literacy Bootcamp in Freetown, Sierra Leone, for 55 participants, including journalists, civil society members, and private and public sector representatives. One of the Bootcamp’s primary objectives was to build data literacy skills to nurture the homegrown development of information and communication technologies (ICT) solutions to development problems.
Here are five tools Bootcamp participants employed to help capture, manipulate, and visualize data: