The International Monetary Fund Fiscal Affairs Department has published a ‘How-To Note‘ on the topic of tax expenditures evaluation, prepared by Sebastian Beer, Dora Benedek, Brian Erard, Jan Loeprick, with contribution of the GTED co-leads Flurim Aliu and Agustin Redonda and other international experts.
As the note points out, ‘systematic evaluations are needed to guide informed decision-making and to avoid a situation where the narrative on the benefits of TEs is primarily driven by profiting stakeholders… 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 contributes to that policy objective. Although important lessons can be learned from country practices in implementing increasingly ambitious evaluation processes, there is no single best-practice approach to replicate’.
Read the full IMF note: How to evaluate tax expenditures