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Business and Economics > Budgeting

You are looking at 1 - 7 of 7 items for :

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Cover IMF How To Notes
How to Evaluate Tax Expenditures
Sebastian Beer
,
Ms. Dora Benedek
,
Brian Erard
, and
Jan Loeprick
Governments use tax expenditures (TEs) to provide financial support or benefits to taxpayers. The budgetary impact of TEs can be similar to that of direct outlays: after the support is provided, less money is available to fund other government priorities. Systematic evaluations are needed to guide informed decision-mak¬ing and to avoid a situation where the narrative on the benefits of TEs is primarily driven by profiting stakeholders. By TE “evaluation,” this note refers to a process that seeks to systematically inform policymak¬ers on the desirability of introducing or maintaining specific tax benefits by gathering and analyzing avail¬able quantitative and qualitative information on their effects. Evaluation processes can be tailored to different levels of data availability and analytical capacity. An evaluation should focus on the policy objective of a TE and whether it effectively and efficiently contrib¬utes to that policy objective. Although important lessons can be learned from coun¬try practices in implementing increasingly ambitious evaluation processes, there is no single best-practice approach to replicate.
Keywords:
tax expenditures; cost-benefit assessment; public policy evaluation; sample evaluation; publication order; publication service; title page; post evaluation; Tax incentives; Compliance costs; Value-added tax; Global; East Asia
Cover IMF How To Notes
How to Establish a Tax Policy Unit
Martin Grote
This paper explores that in developing economies, sufficient tax revenue is necessary to finance spending on health care, education, and infrastructure—all of which are prerequisites for economic growth and development. However, it is not simply the revenue ratio that matters; the quality of the revenue system is also essential for delivering fair and efficient outcomes. To design a revenue system that fosters sustainable economic and social development and enjoys broad public support, it is essential for tax reform proposals to be carefully assessed, quantitatively analyzed, and openly debated. This requires that decision makers and all stakeholders in the debate have access to the best available facts, data, and independent evidence-based analysis, including about the impact of tax reforms on revenue, the income distribution, and economic performance. The central institutional actor in the decision making process—the executive—is best supported in this process by what is generally called a tax policy unit (TPU). TPUs are tasked to guide and inform the tax policy debate, based on facts, independent data analysis, and multidisciplinary efforts.
Keywords:
FADHTN; HTN; tax policy unit; tax; administration; revenue; TPU leadership; TPU staff; TPU management; tax reform commission; collection activity; revenue administration representation; mid-sized TPU; treaty negotiations; tax expenditure report; Tax law; Tax policy units; Tax expenditures; Africa
Cover IMF Working Papers
The Political Economy of Revenue-Forecasting Experience From Low-Income Countries
Mr. Stephan Danninger
,
Ms. Annette J Kyobe
, and
Mr. M. Cangiano
This paper analyzes interference and timeliness in the revenue-forecasting process, using new data on revenue-forecasting practices in low-income countries. Interference is defined as the occurrence of a significant deviation from purely technical forecasts. A theoretical model explains forecasting interference through government corruption. The data broadly supports the model, and the results are robust to alternative explanations. The paper also constructs three indices-transparency, formality, and organizational simplicity-that characterize revenue-forecasting practices, and assesses their effectiveness in producing an upfront-that is, timely-budget envelope. More transparent and simple forecasting processes lead to early budget constraints, while formality has no measurable effect.
Keywords:
WP; absolute value; estimation practice; forecasting Interference; revenue forecast; revenue forecasting; corruption; forecasting bias; country corruption; revenue-Forecasting practice; forecasting process; expenditure pressure; state capture; state forecaster; low-income country; government efficiency; expenditure pressure motive; budget submission; expenditure plan; Budget planning and preparation; Western Hemisphere; Sub-Saharan Africa
Cover IMF Staff Country Reports
Austria: Staff Report for the 2003 Article IV Consultation
International Monetary Fund
The Austrian economy performed well, but long-term problems were unaddressed. Austria has weathered the slump well. The government's economic policy priorities and recent achievements have been commendable. Tax reform will help improve the economy's long-term growth potential. Successful reform of inter-governmental fiscal relations is key to achieving the medium-term fiscal objectives. The recent pension reform will ensure long-term sustainability of the pension system. The creation of the financial market authority has strengthened financial supervision but continued vigilance is required. The government's structural reform agenda is appropriate.
Keywords:
ISCR; CR; authority; Financial Market authority; staff appraisal; policy; staff statement; stability program; EU-accession countries; Pension reform; Fiscal stance; Tax incidence; Global; Eastern Europe; Europe; Central and Eastern Europe
Cover IMF Working Papers
Tax Revenue Forecasts in IMF-Supported Programs
Mr. Mikhail Golosov
and
Mr. John R King
Year-ahead forecasts of tax revenues incorporated into IMF programs for low-income countries, from 1993 to 1999, are compared with the corresponding outturns. The accuracy of these forecasts was low, with a mean absolute percentage error of 16 percent. Forecasts of tax revenues as a percentage of GDP were biased upwards, but there was no significant bias in forecasts of nominal tax revenues. Upward bias in the tax revenue forecasts was associated with subsequent interruptions to the program, and the length of time between the commencement of the program and the beginning of the year for which the forecast was made.
Keywords:
WP; tax revenue; tax revenue forecast; GDP; Forecasting; tax revenues; IMF-supported programs; nominal tax revenues; revenue estimation; forecasted tax revenue ratio; revenue collector; program revenue; tax ratio; Revenue forecasting; Budget planning and preparation; Debt bias; GDP forecasting; Africa
Cover IMF Working Papers
Distributional Implications of Government Tax and Expenditure Policies: Issues, Problems, and Methodology
International Monetary Fund
This paper examines the methodological issues arising in the measurement of the distributional impact of tax and expenditure policies, with emphasis on the problems related to the measurement of the impact of adjustment programs on the welfare of the poor. Both conceptual and empirical considerations suggest that public expenditures are a more potent instrument for distributional purposes than taxes but are also more difficult to analyze and evaluate. The paper concludes that more research is needed toward a better measurement of expenditure benefits.
Keywords:
WP; income; issue; net; public goods; transfer payment; household income; expenditure side; income elasticity; income measure; expenditure benefit; expenditure incidence; expenditure statistics; government expenditure policy; income concept; income level; extent income; consumption basket; Personal income; Income distribution; Tax incidence; Tax expenditures; Global
Cover IMF Working Papers
Case for Earmarked Taxes: Theory and Example
International Monetary Fund
The earmarking (or setting aside) of revenues from various taxes for specific types of expenditure is a much maligned fiscal practice. The paper examines a number of theoretical arguments and institutional circumstances under which earmarking (even widespread earmarking) may be welfare enhancing. The paper also questions the criticism that earmarking seriously erodes budgetary efficiency, and draws on the experience of Colombia to demonstrate that the worst fears of critics do not necessarily come to pass.
Keywords:
WP; earmarking provision; gasoline tax; tax burden; public expenditure; earmarked tax; tax share; share h; taxes deal; valorization tax; shares gi; Tax expenditure policy; Budget planning and preparation; Extra-budgetary funds; Consumption; Africa