sically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates.

More than 70% of the world's population live in developing or underdeveloped countries normally referred to as the Third World. Over a billion people live on $2 a day or less which is insufficient for economic survival.

The IMF and World Bank have over the past 25years played prominent roles in the economies of most poor countries especially those in Africa and South America following the Debt crisis initiated by the Mexican default in 1982.

The IMF in particular have forced many to implement painful reforms such as currency devaluations, privatizations, deregulations, removal of budget busting subsidies and countless of others. The objective was not only to quickly revive the economies of these countries but to engineer super-charged economic growth that would lift these countries out of poverty. On the latter count in particular however, they have not succeeded.

Was it that these policies were not good? Actually,they were but in most cases either poorly implemented by unenthusiastic governments or applied at the wrong time. And because they brought about a lot of pain, resistance to more reforms increased. Subsequent reforms either had to be jettisoned or postponed. Majority of experts have come to the conclusion that reforms implemented over the past 20years have not brought about any discernable benefits to majority of these countries and that the two Bretton Wood institutions at most only helped to ameliorate the situation. Their goal therefore to lift many out of poverty has been considered a failure

What policy should the two Bretton Wood institutions have encouraged to boost economic growth if any existed? That is low taxes.

Low income and corporate taxes have been proven to not only speed up economic growth but boost government revenues. How can this be?

Low taxes encourage investments, both local and foreign. These two are very important especially the latter as these poor countries have a low savings rate and need to have a high level of investment to grow. Foreign portfolio and FDI naturally increase the overall rate of investment relative to GDP.

Businessman love low corporate taxes. This is basically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates.

aluations, privatizations, deregulations, removal of budget busting subsidies and countless of others. The objective was not only to quickly revive the economies of these countries but to engineer super-charged economic growth that would lift these countries out of poverty. On the latter count in particular however, they have not succeeded.

Was it that these policies were not good? Actually,they were but in most cases either poorly implemented by unenthusiastic governments or applied at the wrong time. And because they brought about a lot of pain, resistance to more reforms increased. Subsequent reforms either had to be jettisoned or postponed. Majority of experts have come to the conclusion that reforms implemented over the past 20years have not brought about any discernable benefits to majority of these countries and that the two Bretton Wood institutions at most only helped to ameliorate the situation. Their goal therefore to lift many out of poverty has been considered a failure

What policy should the two Bretton Wood institutions have encouraged to boost economic growth if any existed? That is low taxes.

Low income and corporate taxes have been proven to not only speed up economic growth but boost government revenues. How can this be?

Low taxes encourage investments, both local and foreign. These two are very important especially the latter as these poor countries have a low savings rate and need to have a high level of investment to grow. Foreign portfolio and FDI naturally increase the overall rate of investment relative to GDP.

Businessman love low corporate taxes. This is basically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates.

lot of pain, resistance to more reforms increased. Subsequent reforms either had to be jettisoned or postponed. Majority of experts have come to the conclusion that reforms implemented over the past 20years have not brought about any discernable benefits to majority of these countries and that the two Bretton Wood institutions at most only helped to ameliorate the situation. Their goal therefore to lift many out of poverty has been considered a failure

What policy should the two Bretton Wood institutions have encouraged to boost economic growth if any existed? That is low taxes.

Low income and corporate taxes have been proven to not only speed up economic growth but boost government revenues. How can this be?

Low taxes encourage investments, both local and foreign. These two are very important especially the latter as these poor countries have a low savings rate and need to have a high level of investment to grow. Foreign portfolio and FDI naturally increase the overall rate of investment relative to GDP.

Businessman love low corporate taxes. This is basically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates.

mic growth if any existed? That is low taxes.

Low income and corporate taxes have been proven to not only speed up economic growth but boost government revenues. How can this be?

Low taxes encourage investments, both local and foreign. These two are very important especially the latter as these poor countries have a low savings rate and need to have a high level of investment to grow. Foreign portfolio and FDI naturally increase the overall rate of investment relative to GDP.

Businessman love low corporate taxes. This is basically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates.

sically the reason for the increase in investment. The rates should be low all round and not just targeted to a few strategic sectors. This will prove helpful especially in the service industries which are usually neglected in the allocation of tax holidays to preferential sectors.

Not only does low corporate tax boost economic growth but tax collection as well. It actualises this by swelling the level of compliance. The lower the rates, the higher the compliance rate in general as people are more enthusiastic about paying lower rates. In Russia when government slashed both income and corporate taxes to a maximum of 13% and 24% respectively, government revenues increased by 40%.

An increase in tax revenues is most welcome as this will improve the fiscal position of government which in most cases is in the red and hence, reduce its borrowing needs. In turn, a reduction in borrowing will lead to a reduction in interest rates which will in turn lead to an increase in loans to the private sector with its correspondingly positive effects on the economy.

Though a lot of light has been shed on low corporate taxes, this should not downplay be positive effects income tax rates too play.

Low income taxes boost spending power and savings. It also has the benefit of bringing many workers hitherto working in the informal sectors into the formal economy. When incomes taxes were slashed in Russia, many workers appealed to their firms to regularise their activities with government as this would enable them (workers) access to credit from banks and other financial institutions.

Also the increased spending power helps to boost GDP. In the developed world, consumer spending is the major driver of economic growth contributing over 60% to that of the American economy. It is playing an increased role in many developing countries today.

Also an increase in savings is also welcome. This will improve the quantum of capital available for investment thereby driving growth. It will also lead to an reduction in interest rates with its obvious benefits.

Ireland is the most recent example of a country that has used low taxes to drive economic growth. It is normally referred to as the Celtic tiger in reference to the tigerish rates of growth it has enjoyed for many years. This has lifted it out of its poverty and high unemployment for which it had long been associated it.

Its present corporate tax rate of 12.5% is the second lowest in the European Union and one of the lowest in the world. Its per capita income of around $40,000 is the one of the highest in the EU. And the interesting thing is that as at 1994, the country had been written off! This is what low taxes can