Friday, October 21, 2011

World Bank gets it wrong on tax again

For many years the World Bank (pictured) has published a Doing Business guide which ranks countries according to how "business-friendly" they consider the regulatory environment. This has meant that countries that don't provide effective worker protection are deemed "business-friendly", while those that try to protect their environment are deemed "unfriendly".

Among the indicators used in the guide is a Paying Taxes Indicator (PTI), and - you guessed it - countries are ranked according to their corporate tax rates. In Bankspeak taxing business is "unfriendly".

TJN has regularly contacted the World Bank over the past eight years to demand that this indicator be scrapped. Sadly the World Bank, tied to a failed ideology and incompetent at virtually everything it does, has resisted this demand. This year, yet again, and despite widespread complaints, the Doing Business guide includes the PTI.

Our verdict: while public services collapse around the world and the private sector visibly fails to take up the slack, the World Bank ploughs on regardless. Their Doing Business guide reflects the influence of corporate lobbyists in and around Washington and should be consigned to history.

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