Tax Expenditures--Shedding Light on Government Spending through the Tax System : Lessons from Developed and Transition Economies

Polackova Brixi, Hana ; Valenduc, Christian M.A. ; Swift, Zhicheng Li

Washington, DC:World Bank

关键词: TAX EXPENDITURES;    TAX SYSTEMS;    GOVERNMENT SPENDING;    LIABILITIES;    METHODOLOGICAL ISSUES;   

DOI  :  10.1596/0-8213-5601-1
RP-ID  :  27583

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Recently developing countries havefocused attention on the usefulness of taxexpenditures' in shaping prudent and transparent fiscalpolicy. In adopting a market economy, developing countriescommonly use tax expenditures as major fiscal policyinstruments. However, with limited theoretical understandingof, and ad hoc experience with, applying tax expenditures,developing countries now confront not only revenue losseshigher than they had anticipated but also the erosion oftheir tax bases in systems that generally have been inexistence fewer than 10 years. Fortunately, the experienceand practice of developed countries offer insights intounderstanding and applying tax expenditures. Most developedcountries have established tax reporting systems, whichprovide empirical information on their tax expenditures.Such tax reporting systems tend to be part of acountry's overall fiscal system for strengtheninggovernment finance and contribute significantly to fiscaltransparency. Using the information available, severalgovernments attempt to analyze the cost and economic effectsof individual tax expenditures. Some governments even bringtax expenditures into the budgetary process and subject themto a level of scrutiny similar to that for directexpenditures. This book contains several papers on how bothdeveloped and transition economies define and apply taxexpenditure systems. The developed countries-Australia,Belgium, Canada, the Netherlands, and the United States-haveestablished tax expenditure accounting and, in varyingdegress, brought tax expenditures into budgetary process.The experience of China and Poland shed light on why it isimportant for developing and transition economies to ensurefiscal transparency and to perform systematic fiscalanalysis when implementing tax expenditures, as well as howto address these issues in relatively new tax systems.