Governments worldwide forgo an estimated 4% of global GDP—around a quarter of all tax revenues—each year through tax holidays, exemptions, and incentives. Most of these tax expenditures are untracked, unevaluated, and underreported, continuing without clear evidence of impact. This creates a major fiscal drain, leaving fewer resources for infrastructure, health, education, climate action, and other development priorities.
Five leading global research and policy organizations have launched a coalition to accelerate reforms of tax expenditures through evidence-based research and technical assistance in the context of the Fourth Financing for Development Conference (FfD4) recently held in Seville. The coalition reinforces ongoing global tax reform efforts by providing the often-missing practical and analytical foundation for better tax expenditure policies. With the Compromiso de Sevilla calling for ‘enhanced oversight and management of tax expenditures’, the FfD4 outcome provides a clear mandate and momentum for this initiative, ensuring the agreement leads to concrete actions like standardized reporting to improve transparency and oversight, and the rationalization of ineffective tax expenditures.
By leveraging their respective strengths and building on initiatives like the TaxExpendituresLab and the Community of Practice on Tax Expenditures, the coalition will:
- Scale up research and independent technical support to governments
- Exchange expertise and best practices, leverage complementary strengths from different members to provide holistic support
- Ensure tax expenditure reform is prioritised in international debates
As of now, the United Kingdom, Brazil, France, Guinea, Nigeria, Rwanda, Senegal, and Spain have already endorsed the initiative, signaling growing political will to bring transparency and accountability to this area of public finance.
Watch the launch VIDEO
