Publication:
Managing the Effects of Tax Expenditures on National Budgets

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dc.contributor.authorSwift, Zhicheng Li
dc.date.accessioned2012-06-19T18:22:53Z
dc.date.available2012-06-19T18:22:53Z
dc.date.issued2006-05
dc.description.abstractTax expenditures, in the form of tax provisions, are government expenditures. They are conceptually and functionally distinct from those tax provisions whose purpose is to raise revenue. Tax expenditure programs are comparable to entitlement programs. Therefore, tax expenditures must be analyzed in spending terms and integrated into the budgetary process to ensure fiscal accountability. In addition, tax expenditures must be audited for performance and the information must be published (with comprehensive analysis) to ensure fiscal transparency. The author analyzes the concept and definition, size, and effects of tax expenditures, as well as the fiscal accountability and transparency of tax expenditure spending. In short, tax expenditures affect (1) the budget balance, (2) budget prioritization in allocation, (3) the effectiveness and efficiency of fiscal resources, and (4) the scope for abuse by taxpayers, government officials and legislators. While reviewing the current practices in tax expenditures against the requirements of fiscal accountability and transparency, she finds that this fiscal area must be strengthened. The author sketches four building blocks to strengthen tax expenditures toward fiscal accountability and transparency, based on the literature developed by Surry and McDaniel, the practices from industrial and developing countries, the Campos and Pradhan fiscal accountability model, and the International Monetary Fund's fiscal transparency code. The author argues that normative/benchmark tax structure, a revenue-raising component of the tax system, should be formalized. The normative/benchmark tax structure should be legally defined in the tax law and should be transparent. The tax receipts from this normative/benchmark tax structure should be quantified and published. Presently, many countries could publish imputed tax revenue from normative/benchmark tax structures because such data is available. Only if imputed tax revenue is published in the same way as the other budget components-tax revenue received, tax expenditures, direct expenditures, and fiscal balance-will a budget system be truly transparent in terms of revenue-raising activities and expenditure activities. In addition, when the tax revenue-raising activity is formalized, the inherent spending nature of tax expenditures is further exposed. Therefore, tax expenditures should be added to direct expenditures forming total government expenditures. Furthermore, the conventional concept of the size of government should be remedied by including both direct expenditures and tax expenditures.en
dc.identifierhttp://documents.worldbank.org/curated/en/2006/05/6807139/managing-effects-tax-expenditures-national-budget-managing-effects-tax-expenditures-national-budgets
dc.identifier.doi10.1596/1813-9450-3927
dc.identifier.urihttps://hdl.handle.net/10986/8449
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 3927
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectBENCHMARK
dc.subjectBENCHMARKS
dc.subjectBUDGET BALANCE
dc.subjectBUDGET DEFICIT
dc.subjectBUDGET PROCESS
dc.subjectBUDGETARY CONTROL
dc.subjectCORPORATE INCOME TAX
dc.subjectDEFICITS
dc.subjectDEPOSIT ACCOUNTS
dc.subjectDIRECT EXPENDITURE
dc.subjectDIRECT EXPENDITURES
dc.subjectECONOMIC GROWTH
dc.subjectEXPENDITURE MANAGEMENT
dc.subjectEXPENDITURE POLICY
dc.subjectEXPENDITURE PROGRAMS
dc.subjectFEDERAL BUDGET
dc.subjectFINANCIAL TRANSACTIONS
dc.subjectFISCAL ACCOUNTABILITY
dc.subjectFISCAL ACTIVITIES
dc.subjectFISCAL BALANCE
dc.subjectFISCAL COSTS
dc.subjectFISCAL DEFICIT
dc.subjectFISCAL POLICY
dc.subjectFISCAL RESOURCES
dc.subjectFISCAL SUSTAINABILITY
dc.subjectFISCAL SYSTEM
dc.subjectFISCAL TRANSPARENCY
dc.subjectGDP
dc.subjectGOVERNMENT EXPENDITURES
dc.subjectGOVERNMENT SPENDING
dc.subjectHOUSING
dc.subjectINCOME
dc.subjectINCOMES
dc.subjectINFLATION
dc.subjectLOCAL GOVERNMENTS
dc.subjectMEDIUM-TERM EXPENDITURE FRAMEWORKS
dc.subjectMIDDLE INCOME COUNTRIES
dc.subjectNATIONAL BUDGETS
dc.subjectPERSONAL INCOME TAX
dc.subjectPROPERTY TAX
dc.subjectPROVISIONS
dc.subjectPUBLIC
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC EXPENDITURE
dc.subjectPUBLIC FUNDS
dc.subjectPUBLIC PROCUREMENT
dc.subjectPUBLIC RESOURCES
dc.subjectPUBLIC SECTOR
dc.subjectREGULATORY FRAMEWORK
dc.subjectRESOURCE ALLOCATION
dc.subjectRETAIL SALES TAX
dc.subjectROADS
dc.subjectSOCIAL WELFARE
dc.subjectTAX
dc.subjectTAX ADMINISTRATION
dc.subjectTAX BASE
dc.subjectTAX BRACKET
dc.subjectTAX CODE
dc.subjectTAX CREDIT
dc.subjectTAX EXEMPTION
dc.subjectTAX EXEMPTIONS
dc.subjectTAX EXPENDITURE PROGRAMS
dc.subjectTAX EXPENDITURES
dc.subjectTAX INCENTIVES
dc.subjectTAX LAW
dc.subjectTAX LAWS
dc.subjectTAX LIABILITIES
dc.subjectTAX LIABILITY
dc.subjectTAX POLICY
dc.subjectTAX RATE
dc.subjectTAX RATES
dc.subjectTAX REFORM
dc.subjectTAX REVENUE
dc.subjectTAX REVENUES
dc.subjectTAX SIMPLIFICATION
dc.subjectTAX STRUCTURE
dc.subjectTAX STRUCTURES
dc.subjectTAX SUBSIDIES
dc.subjectTAX SYSTEM
dc.subjectTAXPAYER
dc.subjectTAXPAYERS
dc.subjectTRANSFER PRICING
dc.subjectTRANSITION ECONOMIES
dc.subjectTREASURY
dc.subjectWEALTH
dc.titleManaging the Effects of Tax Expenditures on National Budgetsen
dspace.entity.typePublication
okr.crossref.titleManaging The Effects Of Tax Expenditures On National Budgets
okr.date.doiregistration2025-04-10T10:44:10.748051Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2006/05/6807139/managing-effects-tax-expenditures-national-budget-managing-effects-tax-expenditures-national-budgets
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeGovernance
okr.guid602361468341100836
okr.identifier.doi10.1596/1813-9450-3927
okr.identifier.externaldocumentum000016406_20060523092056
okr.identifier.internaldocumentum6807139
okr.identifier.reportWPS3927
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/05/23/000016406_20060523092056/Rendered/PDF/wps3927.pdfen
okr.topicMacroeconomics and Economic Growth::Fiscal Adjustment
okr.topicEconomic Theory and Research
okr.topicPublic Sector Fiscal Adjustment
okr.topicPublic Sector Economics and Finance
okr.topicLaw and Development::Tax Law
okr.topicPublic Sector Development
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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