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Business and Economics > Budgeting

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
  • Efficiency; Optimal Taxation x
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Cover IMF Staff Country Reports
Belgium: Technical Assistance Report-Revenue Administration Gap Analysis Program–The Value Added Tax
International Monetary Fund. Fiscal Affairs Dept.
This paper presents the results of applying the Revenue Administration Gap Analysis Program – Value-Added Tax (RA-GAP VAT) gap estimation methodology to Belgium for the period 2011-2021. The RAGAP methodology employs a top-down approach for estimating the potential VAT base, using statistical data on value-added generated in each sector. VAT collections have, on average, remained relatively stable in real terms over the period 2011 through 2021, the period under review for this report, at around 7 percent of gross domestic product (GDP). Like the VAT revenues, the compliance gap, as a percent of GDP, has appeared to be largely stable over the period 2011 to 2021 at around 2 percent of GDP. The compliance gap appears to be largely concentrated in the Professional and Managerial Services sector. The results on the distribution of the compliance gap by sector are not to be considered definitive, only suggestive, and so further analysis needs to be conducted to corroborate or refute these findings and to find possible causes for the noncompliance in these sectors.
Keywords:
VAT collection; VAT gap; Gap term; VAT Gap; revenue performance; Tax gap; Value-added tax; Revenue Administration Gap Analysis Program (RA-GAP); Tax expenditures; Europe
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 Working Papers
Reforming Tax Expenditures in Italy: What, Why, and How?
Justin Tyson
The IMF has advised country authorities to roll back tax expenditures as a way to support fiscal consolidation efforts—urging them to evaluate tax expenditures according to clear criteria, and assessing their impact on public finances, economic efficiency, equity, and administrative and compliance costs. This paper analyzes tax expenditures in Italy, considering the extent to which tax expenditures can be considered part of an optimal tax system and possible reforms.
Keywords:
WP; tax expenditure; expenditure; tax; government; Tax expenditures; optimal taxation; efficiency; equity; budget process; substitute tax regime; expenditure program; labor tax wedge; draft tax reform law; tax design; tax norm; tax expenditure cost; single tax; differential VAT regime; Value-added tax; Tax allowances; Personal income tax; Corporate income tax
Cover IMF Working Papers
Spend Now, Pay Later? Tax Smoothing and Fiscal Sustainability in South Asia
International Monetary Fund
This paper tests a version of Barro’s tax-smoothing model, which assumes intertemporal optimization by a government seeking to minimize the distortionary costs of taxation, using Pakistan and Sri Lankan data for 1956-95 and 1964-97, respectively. The empirical results indicate that Pakistan’s fiscal behavior is consistent with tax smoothing, but not Sri Lanka’s. Moreover, fiscal behavior in both countries was dominated by a stagnation of revenues, large tax-tilting-induced deficits, and the consequent accumulation of excessive public liabilities. Analysis of the time-series characteristics of tax-tilting behavior indicates that for both countries the stock of public liabilities is unsustainable under unchanged fiscal policies.
Keywords:
WP; budget surplus; government spending; Tax smoothing; tax tilting; fiscal sustainability; Pakistan; Sri Lanka; tax-smoothing hypothesis; budget imbalance; tax-Smoothing hypothesis; Budget planning and preparation; Government debt management; Stocks; South Asia
Cover IMF Working Papers
Tax Smoothing in a Financially Repressed Economy: Evidence from India
Mr. Paul Cashin
,
Nilss Olekalns
, and
Ms. Ratna Sahay
India has a long history of running fiscal deficits. Two broad considerations motivate a government to run a deficit: tax smoothing and tax tilting. This paper tests a version of Barro’s tax-smoothing model, using Indian data for the period 1951-52 to 1996-97. The empirical results indicate that the central government of India has tax-smoothed, while the regional governments of India have not. The paper also finds evidence of tax tilting, reflected in financial repression, which has led to the accumulation of excessive public liabilities.
Keywords:
WP; government spending; budget surplus; Tax smoothing; financial repression; fiscal policy; India; tax-smoothing hypothesis; tax-smoothing model; central government; tax-smoothing surplus; surplus granger; fiscal surplus; tax-Smoothing surplus; Government debt management; Budget planning and preparation; Stocks; North America