Too many have swallowed the myth that lowering corporate income tax (CIT) is necessary to attract foreign direct investment (FDI) for growth. Meanwhile, the World Bank’s highly influential, but dubious Doing Business Report recommended tax incentives without evidence. Consequently, IMF tax policy recommendations to Sub-Saharan African (SSA) countries from 1998 to 2008 reduced corporate and personal income tax rates while promoting VAT. Evidence contradicts adviceWorld Bank research and surveys have long found that tax incentives do not really attract FDI inflows. A World Bank report found no strong evidence that tax incentives attracted non-resource “greenfield” or additional new FDI.

Source: The Edge Markets July 06, 2021 05:26 UTC