Effectiveness and Economic Impact of Tax Incentives in the SADC ...

Contents
Executive Summary xi
1. Introduction 1-1
1.1 Starting Point—Principles of Taxation for Developing Countries 1-2
1.2 What are Tax Incentives? 1-4
1.3 “Effectiveness” and “Impact” of Tax Incentives 1-5
1.4 Study Organization 1-6
2. Taxation, Investment, and Growth 2-1
2.1 Capital Investment and Economic Growth 2-1
2.2 Theory of the Determinants of Investment 2-3
2.3 Empirical Evidence for Taxation as a Determinant of Investment 2-9
2.4 Lesson for SADC 2-13
3. Economics of Tax Incentives: Pros and Cons 3-1
3.1 Ten Arguments in Favor of Investment Tax Incentives 3-1
3.2 Ten Arguments against Investment Tax Incentives 3-5
3.3 Summary 3-18
4. Economic Toolkit for Analyzing Tax Incentives 4-1
4.1 Marginal Effective Tax Rate 4-1
4.2 Budget Impact—Monitoring “Tax Expenditures” 4-10
4.3 Screening Criteria 4-13
5. Design of Investment Tax Incentives 5-1
5.1 Design Considerations 5-1