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Simplifying tax policy comes with costs and benefits. This paper explores simplification options for the taxation of MNEs, an area where administrative and compliance costs of the current rules are large. Simplified approaches seek to reduce these costs by relying on an approximation of the true tax base, potentially distorting resource allocation. We examine the efficiency cost of transfer pricing simplification theoretically and empirically. Using a sample of 300,000 firms located in 22 countries, we estimate that common transfer pricing practices reduce efficiency between 0.25 and 2.2 percent of total factor productivity across sectors. Focusing on the manufacturing sector, we then observe that simplification more than doubles sectoral inefficiency on average. However, large differences exist, with moderate efficiency costs in several sectors.

Macroeconomics --- Economics: General --- International Taxation --- Production and Operations Management --- Taxation --- Industries: Manufacturing --- Taxation, Subsidies, and Revenue: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Industry Studies: Manufacturing: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Manufacturing industries --- Transfer pricing --- Taxes --- Total factor productivity --- Productivity --- Tax wedge --- Tax policy --- Manufacturing --- Economic sectors --- Currency crises --- Informal sector --- Economics --- Industrial productivity --- Tax administration and procedure --- Mexico

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A lack of timely financing for purchases of vaccines and other health products impeded the global response to the COVID-19 pandemic. Based on analysis of contract signature and delivery dates in COVID-19 vaccine advance purchase agreements, this paper finds that 60-75 percent of the delay in vaccine deliveries to low- and middle-income countries is attributable to their signing purchase agreements later than high-income countries, which placed them further behind in the delivery line. A pandemic Advance Commitment Facility with access to a credit line on day-zero of the next pandemic could allow low- and middle-income countries to secure orders earlier, ensuring a much faster and equitable global response than during COVD-19. The paper outlines four options for a financier to absorb some or all of the risk associated with the credit line and discusses how the credit would complement other proposals to strengthen the financing architecture for pandemic preparedness, prevention, and response.

Macroeconomics --- Economics: General --- Diseases: Contagious --- Industries: Financial Services --- Demography --- Publicly Provided Goods: General --- Health: General --- Industry Studies: Manufacturing: General --- Economic Growth and Aggregate Productivity: General --- Health Behavior --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Demographic Economics: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Infectious & contagious diseases --- Finance --- Health economics --- Population & demography --- COVID-19 --- Health --- Lines of credit --- Financial institutions --- Population and demographics --- Currency crises --- Informal sector --- Economics --- Communicable diseases --- Loans --- Population --- India

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The pandemic is not over, and the health and economic losses continue to grow. It is now evident that COVID-19 will be with us for the long term, and there are very different scenarios for how it could evolve, from a mild endemic scenario to a dangerous variant scenario. This realization calls for a new strategy that manages both the uncertainty and the long-term risks of COVID-19. There are four key policy implications of such as strategy. First, we need to achieve equitable access beyond vaccines to encompass a comprehensive toolkit. Second, we must monitor the evolving virus and dynamically upgrade the toolkit. Third, we must transition from the acute response to a sustainable strategy toward COVID-19, balanced and integrated with other health and social priorities. Fourth, we need a unified risk-mitigation approach to future infectious disease threats beyond COVID-19. Infectious diseases with pandemic potential are a threat to global economic and health security. The international community should recognize that its pandemic financing addresses a systemic risk to the global economy, not just the development need of a particular country. Accordingly, it should allocate additional funding to fight pandemics and strengthen health systems both domestically and overseas. This will require about $15 billion in grants this year and $10 billion annually after that.

Macroeconomics --- Economics: General --- Diseases: Contagious --- Health Policy --- Demography --- Publicly Provided Goods: General --- Health: General --- Industry Studies: Manufacturing: General --- Economic Growth and Aggregate Productivity: General --- Health Behavior --- Analysis of Health Care Markets --- Demographic Economics: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Infectious & contagious diseases --- Health economics --- Health systems & services --- Population & demography --- Financial crises --- Economic sectors --- COVID-19 --- Health --- Communicable diseases --- Health care --- Population and demographics --- Currency crises --- Informal sector --- Economics --- Medical care --- Population

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Simplifying tax policy comes with costs and benefits. This paper explores simplification options for the taxation of MNEs, an area where administrative and compliance costs of the current rules are large. Simplified approaches seek to reduce these costs by relying on an approximation of the true tax base, potentially distorting resource allocation. We examine the efficiency cost of transfer pricing simplification theoretically and empirically. Using a sample of 300,000 firms located in 22 countries, we estimate that common transfer pricing practices reduce efficiency between 0.25 and 2.2 percent of total factor productivity across sectors. Focusing on the manufacturing sector, we then observe that simplification more than doubles sectoral inefficiency on average. However, large differences exist, with moderate efficiency costs in several sectors.

Mexico --- Macroeconomics --- Economics: General --- International Taxation --- Production and Operations Management --- Taxation --- Industries: Manufacturing --- Taxation, Subsidies, and Revenue: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Industry Studies: Manufacturing: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Manufacturing industries --- Transfer pricing --- Taxes --- Total factor productivity --- Productivity --- Tax wedge --- Tax policy --- Manufacturing --- Economic sectors --- Currency crises --- Informal sector --- Economics --- Industrial productivity --- Tax administration and procedure

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Pandemics and epidemics pose risks to lives, societies, and economies, and their frequency is expected to increase as rising trade and increased human interaction with animals leads to the emergence of new diseases. The COVID-19 pandemic teaches us that we can and must be better prepared, with scope for much greater global coordination to address the financing, supply-chain, and trade barriers that amplified the pandemic’s economic costs and contributed to the emergence of new variants. This paper draws seven early lessons from the COVID-19 pandemic that could inform future policy priorities and help shape a better global response to future crises.

India --- Macroeconomics --- Economics: General --- Diseases: Contagious --- Health Policy --- Exports and Imports --- Publicly Provided Goods: General --- Health: General --- Industry Studies: Manufacturing: General --- Economic Growth and Aggregate Productivity: General --- Health Behavior --- Analysis of Health Care Markets --- Macroeconomic Aspects of International Trade and Finance: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Infectious & contagious diseases --- Health systems & services --- Health economics --- International economics --- COVID-19 --- Health --- Health care --- Trade finance --- International trade --- Currency crises --- Informal sector --- Economics --- Communicable diseases --- Medical care --- International finance --- Covid-19