This manual is a contribution to the rich body of literature on tax expenditures and aim to inform policymakers and policy debates on tax expenditures reform. In doing so, it builds on the existing knowledge and endeavors to provide a comprehensive guidance on key aspects of tax expenditure analysis. Considering that cross-country comparability of tax expenditure estimates is challenging due to differences in benchmarking, this manual specifically aims to provide guidance on how to benchmark some of the most common features of a tax system. This manual should be seen as a contribution to the vast ocean of knowledge on tax expenditures, rather than an exhaustive guide to all their complexities. This guidance endeavors to assist policy practitioners, especially in developing countries, in navigating and understandingtax expenditure issues.
The manual is divided into nine chapters. Chapter 1 introduces the concept of tax expenditures, compares them with direct spending, followed by their definition and classification. Chapter 2 presents some global trends. Chapter 3 covers benchmarking of tax system including approaches to benchmark common provisions related to major taxes. Chapter 4 covers measurement issues, including a discussion on methodologies. Chapter 5 covers guidance on reporting in the light of international experience. Chapter 6 covers issues related to evaluation of tax expenditures followed by Chapter 7 specially devoted to cost-benefit analysis. Chapter 8 covers governance issues related to fiscal management of tax expenditures. Chapter 9 is the concluding section, which discusses the political economy of tax expenditure reforms and suggests a framework for tax expenditure reforms.
Citation: “World Bank. 2024. Tax Expenditure Manual. © Washington, DC: World Bank. http://hdl.handle.net/10986/41871 License: CC BY-NC 3.0 IGO.”
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