Government-driven strategies: Regulation and taxation

There is a perception that governments generally offer more roadblocks than express lanes for private sector development in emerging markets. Emerging market CEOs factor in the regulatory framework more strongly than their developed-market peers when making business decisions. Plus, emerging-market CEOs are just as concerned about the possibility of overregulation as chief executives from developed markets.
  • Overall, CEOs in emerging markets believed that labour laws and the tax regime are amongst the top areas in which governments could make improvements, followed by law and enforcement, and education.

  • The CEOs we interviewed pointed out that arbitrary enforcement and unpredictable regulatory changes added to the regulatory burden and to uncertainty in business.
 Highlight: Emerging-market CEOs experience greater government intervention through higher taxation burdens. CEOs also remarked that the cost of complying with the tax rules represents an additional cost borne by the company.

Which of the following areas in which the Government could potentially improve, would you consider to be the most important area?
Areas for government improvement differ among emerging markets
Videos: CEO insights on emerging markets
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