Title page
Fiscal Affairs Department
How to Evaluate Tax
Expenditures
Prepared by Sebastian Beer, Dora Benedek, Brian Erard, and Jan Loeprick
INTERNATIONAL MONETARY FUND
Copyright Page
©2022 International Monetary Fund
Cover Design: IMF Creative Solutions
Composition: The Grauel Group
HOW TO NOTE
Fiscal Affairs Department
How to Evaluate Tax Expenditures
Prepared by Sebastian Beer, Dora Benedek, Brian Erard, and Jan Loeprick
Names: Beer, Sebastian, author. | Benedek, Dora, author. | Erard, Brian, author. | Loeprick, Jan, author. | International Monetary Fund. Fiscal Affairs Department, issuing body. | International Monetary Fund, publisher.
Title: How to evaluate tax expenditures / prepared by Sebastian Beer, Dora Benedek, Brian Erard, and Jan Loeprick.
Other titles: How to notes (International Monetary Fund).
Description: Washington, DC : International Monetary Fund, 2022. | Dec. 2022. | Includes bibliographical references.
Identifiers: 9798400221507 (paper)
9798400225383 (ePub)
9798400225536 (Web PDF)
Subjects: Tax expenditures.
Classification: LCC HJ4642.B44 2022
The authors would like to thank Flurim Aliu, Katherine Baer, Ruud De Mooij, Tibor Hanappi, Alexander Klemm, Mario Mansour, Agustin Redonda, Artur Swistak, and colleagues who provided guidance as part of the IMF’s departmental review process for providing helpful comments and suggestions.
DISCLAIMER: Fiscal Affairs Department (FAD) How To Notes offer practical advice from IMF staff members to policymakers on important issues. The views expressed in FAD How To Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or its management.
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Contents
From Tax Expenditure Reporting to Evaluation
Scope, Depth, and Timing of Evaluations
What Should Be Evaluated?
Tools for Measuring Impact
Practical Implementation
Conclusion
References
Boxes
1. The Benchmark Tax System
2. Sample Evaluation Questions
Figures
1. Total Tax Expenditures (in Percent of GDP)
2. Number of Recorded Tax Expenditures
Tables
1. TE Reporting and Evaluation in Selected Economies
2. Approaches for Different Tax Instruments
3. Commonly Used Tools for Evaluation
4. Steps for Conducting an Ex Post Evaluation