How Should the Government Bring Small Firms into the Formal System? Experimental Evidence from Malawi

Campos, Francisco ; Goldstein, Markus ; McKenzie, David

World Bank, Washington, DC

关键词: INFORMALITY;    BUSINESS REGISTRATION;    TAXATION;    ACCESS TO FINANCE;    SMALL AND MEDIUM ENTERPRISES;   

DOI  :  10.1596/1813-9450-8601
RP-ID  :  WPS8601

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Developing country governments seek toreduce the pervasive informality of firms for multiplereasons: increasing the tax base, helping firms accessformal markets and grow, increasing the rule of law, and asa means to obtain data that can be used for other governmentfunctions. However, there is debate as to the best approachfor achieving these goals. This study conducted a randomizedexperiment in Malawi to test three alternatives: (a)assisting firms to obtain a business registrationcertificate that offers access to formal markets but imposesno tax obligations; (b) assisting firms to obtain businessregistration and tax registration; and (c) supplementing theassistance to obtain business registration with a bankinformation session intended to help firms utilize one ofthe key potential benefits of formalizing. The study findsincredibly high demand for obtaining a formal status that isseparate from tax obligations, and very low take-up of taxregistration. Business registration alone has no impact onaccess to formal markets or firm performance. However,coupling registration assistance with the bank informationsession increases the use of formal financial services, andresults in increases in firm sales by 20 percent and profitsby 15 percent. The results highlight the advantages ofseparating business and tax registration, but also the needto assist firms in benefiting from their new formal status.