Simplified tax regimes for micro andsmall enterprises in developing countries are intended tofacilitate voluntary tax compliance. However, surveyevidence suggests that small business taxation based onsimplified bookkeeping or turnover is sometimes perceived astoo complex for microenterprises in countries with highilliteracy levels. Very simple fixed tax regimes notrequiring any books or records tend to be overly popular butprone to abuse. System reforms will require more precisetailoring of the simplified regimes to their targetbeneficiaries, coupled with strong compliance management todetect and deter abuse. The overall objective of simplifiedtaxation for micro and small enterprises (MSEs) indeveloping countries is generally to facilitate voluntarytax compliance and remove obstacles in moving towardbusiness formalization and growth.
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