Bolivia's informal economic sector is the largest in Latin America and has been attributed to many factors including the burden of regulations, the weakness of public institutions, and the lack of perceived benefits to formality. 'Increasing Formality and Productivity of Bolivian Firms' presents fresh qualitative and quantitative analyses to help understand the reasons why firms are informal and the impact of formalization on their profitability, in order to better inform appropriate policies. A crucial finding of the study is that the impact of tax registration on profitability depends on firm size and the ability to issue tax receipts. The smallest and largest firms have lower profits as a result of tax registration because their cost of formalizing exceeds benefits. The study concludes by recommending policy priorities to increase the benefits of formalization through information, training, access to credit and markets, and business support. Longer-term policy recommendations include simplifying formalization, regulatory, and taxation procedures and reducing their costs, as well as measures to boost the productivity of small and micro firms.
- ISBN13 9780821380239
- Publish Date 30 July 2009
- Publish Status Active
- Publish Country US
- Imprint World Bank Publications
- Format Paperback
- Pages 138
- Language English