The Role of Tax Expenditures in Fiscal Policy Making: Challenges and Opportunities for Brazil and Beyond

The Fundação Getúlio Vargas (FGV) and the Council on Economic Policies (CEP), with support from Samambaia Filantropias, are co-hosting a hybrid event at the sidelines of the T20 Summit to present and discuss two new publications on tax expenditure policy.

  • “Improving Tax Expenditure Reporting to Enhance Tax Expenditure Policy Making” – presentation and discussion around a recent T20 Policy Brief that provides specific and actionable policy recommendations for G20 governments.
  • Tax Expenditures Country Report: Brazil – presentation of a country report co-authored by Paolo de Renzio (FGV) and Manoel Pires (FGV) providing a deep dive into tax expenditure policy in Brazil, including a discussion about the role of tax expenditures granted by subnational governments in the country.

  • Tax expenditures (TEs) are preferential tax treatments that lower government revenue and the tax liability of the beneficiary. Their impact is sizeable: according to the Global Tax Expenditures Database (GTED), the global average revenue forgone over the 1990-2022 period is 3.8 percent of GDP and 23.0 percent of tax revenue. Several G20 countries such as Australia, Canada and the United States forgo more than 6 percent of GDP in government revenues through tax expenditures.

    Yet, despite their size and significance, tax expenditures come with a daunting lack of transparency: according to the GTED, half of the 218 jurisdictions surveyed worldwide do not publish any official reports on TEs. Moreover, even when information on TEs is published, the quality, regularity and scope of disclosure are very diverse, and often strikingly poor.

    A global group of researchers led by Agustin Redonda (CEP) has written a policy brief entitled “Improving Tax Expenditure Reporting to Enhance Tax Expenditure Policy Making”, published by the T20 (Task Force 3. Reforming the international financial architecture). The policy brief will be presented during the first part of the event.

    While international and regional platforms can play an important role in improving TE policy making, existing differences in governance and institutional set-ups make TE policymaking a topic that needs to be discussed at the national level. Against this backdrop, CEP and the German Institute of Development and sustainability (IDOS) have recently launched a series of Tax Expenditures Country Reports (TECRs), which consists of country-specific reports that follow a standardized structure and provide a deep dive into national TE systems. Each TECR is focused on topics such as TE transparency, the fiscal cost of TEs, TE benchmarking, TE evaluations and the political economy surrounding TEs.

    The TECR for Brazil, co-authored by Paolo de Renzio and Manoel Pires (FGV), will be presented and discussed in the second part of the event.

  • Preliminary Program

    Wednesday, 13 November 2024
    Rio de Janeiro
    09.30 - 10.00Registration and coffee
    10.00 - 10.15Welcome and opening remarks
    10.15 - 10.30Presentation of the T20 Policy Brief “Improving Tax Expenditure Reporting to Enhance Tax Expenditure Policy Making” (Agustin Redonda, CEP)
    10.30 - 11.00Panel discussion
    11.00 - 11.15Presentation of the TECR for Brazil (Paolo de Renzio/Manoel Pires, FGV)
    11.15 - 11.50Panel discussion
    11.50 - 12.00Closing remarks
    12.00Light lunch

    The conference will provide simultaneous translation for Portuguese and English.

    Venue: Fundação Getúlio Vargas (FGV), FGV IBRE
    Rua Presidente Carlos de Campos, 417 | Laranjeiras – Rio de Janeiro

    Contact: Should you have questions about the event, please reach out to Paolo de Renzio ([email protected]) or Agustin Redonda ([email protected])