Back Matter
Author: Martin Grote1
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund

References

  • Arnold, B.J. 2013. “The Process for Making Tax Policy: An International Comparison—Proceedings of a Round Table on the Tax Policy Process.” Canadian Tax Foundation, Ottawa. June 20.

    • Search Google Scholar
    • Export Citation
  • Benedek, D., R. de Mooij, M. Keen, and P. Wingender. 2015. “Estimating VAT Pass-Through.” IMF Working Paper 15/214, International Monetary Fund, Washington, DC.

    • Crossref
    • Search Google Scholar
    • Export Citation
  • Bird, R.M. 2004. “Administrative Dimensions of Tax Reform.” Asia-Pacific Tax Bulletin, International Bureau of Fiscal Documentation, March: 134–50.

    • Search Google Scholar
    • Export Citation
  • Bird, R.M. 2003. “Managing the Reform Process.” Joseph L. Rotman School of Management, University of Toronto International Tax Program Paper 0301 (April): 32.

    • Search Google Scholar
    • Export Citation
  • D’Ascenzo, M. 2002. “Taxation Law Design.” Journal of Australian Taxation 5 (1): 3458.

  • Du Toit, P. 2004. “Tackling Tax.” In Manuel, Markets and Money—Essays in Appraisal, edited by R. Parsons. City: Press, with du Toit, P. “Tackling Taxes.” Juta, Cape Town, South Africa, 6384.

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund (IMF), Organization for Economic Co-operation and Development (OECD), World Bank, and United Nations. 2016. “Enhancing the Effectiveness of External Support in Building Tax Capacity in Developing Countries.” Report prepared for the G20 Development Working Group by the Platform for Collaboration on Tax, Washington, DC.

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund (IMF). 2015. “Options for Low Income Countries’ Effective and Efficient Use of Tax Incentives for Investment.” Report prepared for the G20 Development Working Group by the Platform for Collaboration on Tax, Washington, DC.

    • Search Google Scholar
    • Export Citation
  • IMF and OECD. 2017. “Tax Certainty.” IMF and OECD Report for the G20 Finance Ministers, March, Washington, DC.

  • Lang, M., J. Owens, P. Pistone, A. Rust, J. Schuch, C. Staringer, and A. Storck (editors). 2016. “Trends and Players in Tax Policy.” Institute for Austrian and International Tax Law, European and International Tax Law and Policy Series 4, Amsterdam: IBFD.

    • Search Google Scholar
    • Export Citation
  • Martinez-Vazquez, J., and E. Heredia-Ortiz. 2009. “Designing and Establishing Fiscal Policy Analysis Units – A Practical Guide.” United States Agency for International Development, Washington, DC.

    • Search Google Scholar
    • Export Citation
  • McIntyre, M. J., and O. Oldman. 1975. “Institutionalizing the Process of Tax Reform: A Comparative Analysis.” Harvard Law School International Tax Program/International Bureau of Fiscal Documentation, Cambridge, MA.

    • Search Google Scholar
    • Export Citation
  • Wales, C. J., and Christopher, P. Wales. 2012. “Structures, Processes, and Governance in Tax Policy-Making: An Initial Report.” Oxford University Centre for Business Taxation, Oxford, United Kingdom.

    • Search Google Scholar
    • Export Citation
  • World Bank. 2015. “East Asia and Pacific Economic Update.” October. World Bank, Washington, DC.

ANNEX 1 Cross-Country Practices with Tax Policy Design

article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
Sources: Individual Ministry of Finance and Treasury websites; Wales and Wales 2012; Arnold 2013; and Lang and others 2016.

This note was prepared by Martin Grote. The author is grateful for useful comments from Ruud de Mooij, Milena Hrdinková, Michael Keen, Alexander D. Klemm, Sebastien Leduc, Andrea Lemgruber, Kiyoshi Nakayama, Victoria J. Perry, Patrick Petit, Diego Mesa Puyo, Irena Jankulov Suljagic, Artur Swistak, and Mick Tackray. He also thanks Peter Barrand, Mario Mansour, and John Norregaard for collaboration in developing Figures 2 and 3.

1

Data constraints stem from, among other things, limited use of information technology and lack of transparency on behalf of institutions and policymakers generating taxpayer data that would inform quantitative and qualitative analyses.

2

Establishment of a TPU is one important element in the wider context of building tax capacity in developing economies (see, for example, IMF and others 2016).

3

Countries with significant extractive industry sectors often add a specialized TPU function that focuses on designing a fiscal framework for extractive industries and negotiates together with the responsible line ministry (that is, mining and energy) production-sharing contracts.

4

Tax policy should be distinguished from tax administrative policy, which refers to policies conducted by the revenue administration’s headquarters in relation to administration, taxpayer services, return and payment processing, collection enforcement, and auditing. Administrative policies are codified into staff procedure manuals and collectively form a key part of the revenue administration’s governance system, often embodied in a stand-alone tax procedures code. Such code provides a uniform approach on all procedural aspects relating to income tax, value added tax, excise duties, and other taxes. The tax procedures code could be an alternative for other provisions present in the various tax laws that deal with procedures of registration, collection, and enforcement. Also, note that the line between tax policy and revenue administration is not always clear-cut, as a specific stance on determining penalties, fines, and tax amnesties is equally important from both a policy and an administrative perspective.

6

Micro level taxpayer data needed for this analysis is not generally public and should be made available to the TPU on an anonymized basis (see Section II.C).

7

Revenue estimates used for budget planning purposes may be the result of interactions between various agencies, facilitated through revenue committees that work towards a technically informed and credible result. In some countries, the ministry of finance relies in part on estimates from reputable think tanks (for example, the Institute of Fiscal Studies in the case of Spain), thereby improving the transparency of underlying assumptions for revenue projections and methods used.

8

Incidence effects can also be informed by evidence reported in external sources. For example, when assessing the incidence of the value added tax in Europe, Benedek and others (2015) report that changes in reduced value added tax rates might not be fully passed through to consumers; such effects might inform European value added tax policy, as well as policies elsewhere.

9

It is not uncommon that countries opt for managing advanced fiscal analysis out of semi-autonomous fiscal institutes. An example of an independent fiscal policy think tank is Britain’s Institute for Fiscal Studies, founded in 1969, and recognized as a leading independent microeconomic research institute. Its research remit is one of the broadest in public policy analysis, covering subjects ranging from tax and benefits to education policy, from labor supply to corporate taxation (see https://www.ifs.org.uk/).

10

Systematically documented information about the organizational arrangements of countries’ TPUs is scarce. South Africa’s TPU has a staff of about 40, with their focus split evenly between legal tax design and economic tax analysis.

11

”Legal drafting” would be an integral part of the process labeled in the figure as “detailed operational policy design.”

12

The TPU may also encourage the revenue administration to share anonymized taxpayer data with academic researchers or international organizations, under strict agreement regarding the disclosure of information. Revenue administrations are increasingly inclined to do this, as new research can benefit the quality of policy analysis and decision making.

How to Establish a Tax Policy Unit
Author: Martin Grote