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Patna, India, February 16, 2013—
IFC, a member of the World Bank Group, is helping the Indian state of Bihar to simplify tax laws and procedures to reduce compliance burden and encourage small businesses to register as taxpayers, widening tax base and improving business climate.
With IFC’s advice, Bihar state has adopted several progressive measures such as a fixed rate of tax for micro and small enterprises with no routine scrutiny, online filing of returns for larger enterprises, simplifying admission of appeals, faster resolutions and refunds. At a workshop organized as part of the initiative to communicate the benefits of new tax reforms, members of the Commercial Tax Bar Association of Bihar and IFC officials discussed mechanisms to effectively resolve tax disputes under the simplified value-added tax laws.
“IFC has provided sound reform recommendations for improving the efficiency of tax administration in the state,” said Ramesh Kumar Rateria, Chairman, Commercial Tax Tribunal in Bihar. Suggestions from this workshop will further improve the efficiency and independence of the Commercial Tax tribunal and contribute to the government’s reform agenda.”
IFC has helped the state widen tax base by bringing about 7,000 micro and small enterprises into the tax fold. Close to 78,000 businesses have filed e-returns till now, compared to 149 when the project started in 2009. According to an appraisal by IMRB, an international market research and consultancy firm, businesses acknowledge that tax compliance is less burdensome after reforms, and the ease of doing business in the state has improved.
Rajul Awasthi, IFC Senior Tax Specialist said, “IFC’s global experience in accelerating and facilitating reforms has helped reduce the time and financial cost that businesses incur in complying with tax rules, thus encouraging them to join the formal economy and widening the tax base.”
Through its investment climate advisory, IFC is implementing reforms in business regulation and taxation in many countries such as Yemen, Georgia, Ethiopia, and Lao PDR. In South Asia, IFC is working in Nepal and Bangladesh to improve the business climate.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In fiscal year 2012, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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