AN OECD Report presented at Ankara has urged that
Governments need to spport the growth and development of SMEs as they face
distinct challenges.
Taxation of SMEs in OECD and G20 Countries assesses the impact of tax policies
on the creation, form and growth of SMEs in 39 OECD and G20 countries. The
report analyses the role and characteristics of SMEs in the economy, the taxation
of SME income, tax preferences for SMEs and simplification measures targeted
at SMEs. The report finds that tax systems can influence the creation and growth
of SMEs through several avenues:
• In many countries, the taxation of SME income provides incentives for SMEs
to incorporate and to distribute income in the form of capital;
• Tax rules that apply to all businesses may disproportionately affect SMEs,
particularly SMEs in their first years of operation or that are credit-constrained;
• Tax compliance costs are proportionately higher for SMEs than for larger
firms.
The study examines tax preferences and simplifications specific to SMEs that
governments use to address these concerns and to foster SME growth. Based on
country experiences, it recommends that such polices be carefully targeted
to affected SMEs, recognising that not all SMEs face the same challenges or
have the same growth potential. In introducing preferential or simplified treatment
for SMEs, the report recommends that care be taken to avoid imposing additional
barriers to SME growth, additional complexity, or distortions to the wider
economy.
“SMEs are a significant source of employment and growth in OECD and G20 economies,”
said Pascal Saint-Amans, Director of the OECD’s Centre for Tax Policy and Administration.
“Careful design of tax policy, and particularly of any tax preferences or simplifications
targeted to SMEs, is vital to ensure that country tax systems support SME success.”
|
