CEP and IDOS Release New Data-Driven Insights on Tax Expenditures
Christian von Haldenwang, Agustin Redonda, Flurim Aliu and Lucas Millan | 2 November 2023
Fiscal, News | Tags: GTED, GTETI, Tax Expenditures
The Council on Economic Policies and the German Institute of Development and Sustainability (IDOS) have released new data on tax expenditures, highlighting how crucial it is for governments to enhance transparency on these policy instruments.
Given the substantial revenue forgone from tax expenditures of close to 4 percent of GDP and 25 percent of tax revenue worldwide, the authors call for governments to improve their tax expenditure reporting, in particular to provide more and better data on tax expenditures including revenue forgone estimates at the provision level as well as a detailed description of the policy objectives they pursue. They also call for more information on evaluations of tax expenditures as a critical requirement for evidence-based policy making in the field.
Tax Expenditures in An Era of Transformative Change: The GTED Flagship Report 2023
by Christian von Haldenwang, Agustin Redonda, Flurim Aliu
„Governments continue to forgo trillions of dollars in tax revenues with a level of opacity that is striking. More than half of the countries worldwide still do not report at all on the costs of tax deductions, exemptions, and other benefits channeled through the tax system to specific segments of their societies and economies“.
The 2023 edition of the Global Tax Expenditures Database (GTED) Flagship Report focuses on the use of tax expenditures (TEs) in the context of transformative change, including shifting global economic growth and consumption patterns in a way that is sustainable within planetary boundaries, as well as in line with societal aspirations of inclusiveness, equity and intergenerational fairness. To that end, it gives an overview of recent developments in tax expenditures reporting and provides insights into their magnitude in terms of revenue forgone. It also discusses the design and methodological approaches of tax expenditures evaluations and zooms in, inter alia, on the implications for tax expenditures of the global minimum corporate tax, their linkages with the consumption of fossil fuels, and their use in support of a green transition. Authors include: Sebastian Beer (IMF), Ana Cinta González Cabral (OECD), Tara Laan (IISD), Sabine Laudage (IDOS), Patrick Lenain (CEP), Jan Loeprick (IMF), Lucas Millán (CEP), Pierce O’Reilly (OECD), Ronald Steenblik (QUNO), Kurt Van Dender (OECD), and Tom Zawisza (OECD).
The Global Tax Expenditures Transparency Index Companion Paper
by Agustin Redonda, Lucas Millan, Christian von Haldenwang, Flurim Aliu
„The Global Tax Expenditures Transparency Index (GTETI) is the first comparative assessment of tax expenditures reporting that covers countries worldwide. It provides a systematic framework to rank countries according to the regularity, quality and scope of their TE reports, and seeks to increase transparency and accountability in the TE field“.
The Global Tax Expenditures Transparency Index (GTETI) Companion Paper introduces the newly launched GTETI and describes the 5 dimensions and 25 indicators that make up the index. It also discusses the rationale and scope, the methodology and assumptions underpinning the assessment process, and the limitations and issues to be considered when using the index. The normative approach behind the GTETI is illustrated in Appendix 1, where a detailed description of an ideal TE report is provided. Appendix 2 contains the GTETI scoring sheet with a detailed list of all indicators and the required supporting documentation.
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