Nonetheless, in developing countries revenue can be recycled to keep the overall tax burden on companies relatively stable, while incentives in favour of environmental improvement and energy efficiency are increased. To ensure that marginal cost and therefore the incentives for efficiency are not reduced, such compensation should be granted on the basis of the number of employees or the economic output, rather than consumption of energy or resources. In this way, efficient companies will gain, as they receive more compensation than they pay in tax, while inefficient companies will lose out. The sector itself will not be affected by any outflow of capital, but will retain capital for reinvestment, research and development. This approach maintains strong incentives for the entire economy, while ensuring the industrial basis in a country is maintained.