Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

A higher discount rate for countries and regions lagging behind will also reflect the need to invest in projects that aremore socially profitable in order to achieve a higher growth rate. This reflects a real convergence objective and wecan then consider the discount rate as a standard benchmark for the rate of return.For the reasons outlined above, EC Working Document No 4 suggested a reference social discount rate for 2007-2013 of 3.5% for the countries not eligible for the Cohesion Fund (CF) and 5.5% for the CF countries. Asmentioned, in recent years, France, Germany and the UK have autonomously adopted values for their nationalprojects that are broadly consistent with this SDR framework. The regions for which the ‘Convergence’ objective isrelevant may consider adopting the 5.5% rate that reflects the faster growth requirement. This would imply greaterselectivity in project appraisal.In special circumstances, country or region-specific SDRs may be utilized, and proposers would justify theirassessments based on specific empirical estimates.Database (Taxation of Wage Income, 2004) and refer to personal income taxation. The tax rate includes central government and sub-centraltaxation, plus employees’ social security contributions for single persons without dependants.208