This document summarizes a research paper on tax expenditures in Nigeria. It discusses how the Nigerian government uses tax incentives and concessions to achieve economic goals, but this results in significant losses of potential tax revenue. Between 2004-2006, revenue losses from various tax exemptions and concessions totaled over N54 billion, N71 billion, and N56 billion respectively. The document examines how tax expenditures are less transparent than direct spending and can undermine fiscal accountability if not properly integrated into budgeting processes. It analyzes the effects of tax expenditures on Nigeria's budget and the economy.
Macroeconomic; Government Expenditure (Comic)Adynn Khairil
The Federal government of Malaysia is projected to record a lower fiscal deficit of 4% of GDP in 2013. Total government revenue is expected to reach RM208.7 billion, with tax revenue at RM159.2 billion. Non-tax revenue is projected to be RM49.5 billion, a 9.6% reduction due to lower returns from investments, petroleum royalties, and the Malaysia-Thailand Joint Authority. Government expenditure consists of operating expenditure, which covers administrative costs, and development expenditure for infrastructure investment to boost economic growth.
The fiscal system of India is based on the constitution and envisages two levels of government - central and state. The constitution distributes legislative powers and taxes across Union, State and Concurrent lists. The central government's tax revenues come from taxes like income tax, customs duties, and excise duties which are either retained by the center or shared with states. Expenditure consists of revenue expenditure on general, social and economic services and capital expenditure. The fiscal deficit is the excess of total expenditure over total receipts and represents the government's total borrowing requirement.
Fiscal policy involves a government adjusting spending levels and tax rates to influence the economy. It can use expansionary policy like tax cuts or increased spending to boost aggregate demand, or contractionary policy like tax increases or spending cuts to reduce inflation. Pakistan faces challenges like tax evasion, a large underground economy, weak fiscal-monetary coordination, and corruption. To address issues, the document recommends increasing the tax-to-GDP ratio by broadening the tax base and rationalizing rates, reducing untargeted subsidies, taxing the agricultural sector, and implementing austerity measures.
Fiscal policy is the government's use of spending and tax policies to influence the economy. The Indian government uses fiscal policy to achieve objectives like economic development, resource mobilization, and regional balanced growth. Key aspects of India's fiscal policy include reliance on indirect taxes and deficit financing. While fiscal policy aims to accelerate growth, reduce inequality and ensure stability, India's mounting public debt and black money pose challenges.
Fiscal policy involves manipulating government spending and taxation to influence the level of aggregate demand and economic activity. It can be used to achieve macroeconomic objectives like reducing unemployment and influencing inflation, as well as non-economic goals. Key tools of fiscal policy include altering tax rates, changing government spending, and borrowing to finance deficits. Maintaining prudent fiscal deficits and public debt levels is important for macroeconomic and financial stability.
Government revenue(Public Fiscal Administration)Suzana Vaidya
The document discusses government revenue and taxation. It defines government revenue as money received by a government from sources like taxes on income, wealth, goods, services, exports/imports, and non-tax sources like profits from state-owned corporations. Revenue is used to fund government services that benefit the public like infrastructure development. The main sources of government revenue are taxes, non-tax revenue, and capital receipts. Taxes are either direct taxes paid directly by individuals/corporations or indirect taxes paid to intermediaries and passed on to consumers. Non-tax revenue comes from sources like dividends, interest, fees, and grants. A good tax system aims to raise sufficient and equitable revenue while minimizing economic burden and incentivizing productivity
Macroeconomic; Government Expenditure (Comic)Adynn Khairil
The Federal government of Malaysia is projected to record a lower fiscal deficit of 4% of GDP in 2013. Total government revenue is expected to reach RM208.7 billion, with tax revenue at RM159.2 billion. Non-tax revenue is projected to be RM49.5 billion, a 9.6% reduction due to lower returns from investments, petroleum royalties, and the Malaysia-Thailand Joint Authority. Government expenditure consists of operating expenditure, which covers administrative costs, and development expenditure for infrastructure investment to boost economic growth.
The fiscal system of India is based on the constitution and envisages two levels of government - central and state. The constitution distributes legislative powers and taxes across Union, State and Concurrent lists. The central government's tax revenues come from taxes like income tax, customs duties, and excise duties which are either retained by the center or shared with states. Expenditure consists of revenue expenditure on general, social and economic services and capital expenditure. The fiscal deficit is the excess of total expenditure over total receipts and represents the government's total borrowing requirement.
Fiscal policy involves a government adjusting spending levels and tax rates to influence the economy. It can use expansionary policy like tax cuts or increased spending to boost aggregate demand, or contractionary policy like tax increases or spending cuts to reduce inflation. Pakistan faces challenges like tax evasion, a large underground economy, weak fiscal-monetary coordination, and corruption. To address issues, the document recommends increasing the tax-to-GDP ratio by broadening the tax base and rationalizing rates, reducing untargeted subsidies, taxing the agricultural sector, and implementing austerity measures.
Fiscal policy is the government's use of spending and tax policies to influence the economy. The Indian government uses fiscal policy to achieve objectives like economic development, resource mobilization, and regional balanced growth. Key aspects of India's fiscal policy include reliance on indirect taxes and deficit financing. While fiscal policy aims to accelerate growth, reduce inequality and ensure stability, India's mounting public debt and black money pose challenges.
Fiscal policy involves manipulating government spending and taxation to influence the level of aggregate demand and economic activity. It can be used to achieve macroeconomic objectives like reducing unemployment and influencing inflation, as well as non-economic goals. Key tools of fiscal policy include altering tax rates, changing government spending, and borrowing to finance deficits. Maintaining prudent fiscal deficits and public debt levels is important for macroeconomic and financial stability.
Government revenue(Public Fiscal Administration)Suzana Vaidya
The document discusses government revenue and taxation. It defines government revenue as money received by a government from sources like taxes on income, wealth, goods, services, exports/imports, and non-tax sources like profits from state-owned corporations. Revenue is used to fund government services that benefit the public like infrastructure development. The main sources of government revenue are taxes, non-tax revenue, and capital receipts. Taxes are either direct taxes paid directly by individuals/corporations or indirect taxes paid to intermediaries and passed on to consumers. Non-tax revenue comes from sources like dividends, interest, fees, and grants. A good tax system aims to raise sufficient and equitable revenue while minimizing economic burden and incentivizing productivity
The document summarizes key fiscal developments in India, including trends in central government receipts and expenditures. Some of the key points include:
- Tax revenues grew at a rate of 12.1% of GDP in 2018-19, with improvements in direct tax collection. However, indirect tax revenues fell slightly due to shortfalls in GST collections.
- Non-tax revenues exceeded budget estimates for 2018-19, helped by higher dividends and profits. Disinvestment receipts also exceeded targets through various instruments.
- Expenditure has been rationalized through moderation of subsidies and initiatives to improve efficiency in the defense sector. Capital expenditures have increased as a proportion of GDP.
- Fiscal
This document defines key terms related to fiscal policy such as bond yield, budget deficit, cyclical fiscal deficit, direct and indirect taxation, national debt, and structural fiscal deficit. It then discusses what fiscal policy is, how it involves taxation, spending, and borrowing to affect aggregate demand. Changes to fiscal policy can impact both aggregate demand and supply. The document also provides breakdowns of UK government spending and revenues, and discusses different types of taxes and their progressiveness.
This document provides an overview of macroeconomics concepts related to fiscal policy in Pakistan. It discusses key topics like the objectives, instruments, and impact of fiscal policy. It notes that Pakistan is facing budget shortfalls due to high government spending, lower tax revenues, and factors like tax evasion. To avoid increasing fiscal deficits, the document suggests that Pakistan could impose new taxes, increase utility prices, and decrease development spending.
The document discusses key aspects of government budgets including:
- Budgets show estimated annual receipts and expenditures and are divided into revenue and capital components.
- Objectives include reallocating resources, managing public enterprises, and promoting economic stability.
- Receipts are classified as revenue or capital, and expenditures are classified as revenue or capital.
- Budgets can be balanced, in surplus, or in deficit depending on a comparison of estimated receipts to expenditures.
- Deficits include revenue deficit, fiscal deficit, and primary deficit, with fiscal deficit being the broadest measure of imbalance.
An investigation of the effect of vat on revenue profiles of south western ni...Alexander Decker
This document summarizes a study that examined the effect of Value Added Tax (VAT) on the revenue profiles of state governments in Southwestern Nigeria from 2002 to 2011. The study used secondary data from approved budgets of five states. Panel regression analysis found that VAT had a positive and significant relationship with state revenues. The study concluded that increasing consumption through poverty alleviation could increase VAT revenues for states by boosting the goods and services subject to VAT.
Fiscal policy! Pakistan Budget 2013 to 2014Rahma Haseeb
The document discusses fiscal policy and Pakistan's government budget, including details on revenue collection from taxes, government expenditures, the types of fiscal policy, and an overview of the 2013-2014 budget which aimed to reduce the fiscal deficit while increasing tax revenue and containing inflation. It also provides information on the National Finance Commission Awards which determine the distribution of financial resources between the federal and provincial governments.
The document discusses sources of government revenue and goods/services provided by governments. It notes that local governments primarily rely on property taxes, while state governments rely mainly on sales and income taxes. The largest sources of federal government revenue are individual income taxes, payroll taxes, and corporate income taxes. It also explains that while some goods and services could potentially be provided privately, governments provide them because they benefit society as a whole.
The document discusses four key functions of public finance: allocation, distribution, stabilization, and growth. It also discusses principles for evaluating a good tax system, including revenue adequacy, stability, simplicity, tax neutrality, economic efficiency, and low administration and compliance costs. The document compares tax systems before and after reforms, noting the need to tailor reforms to a country's existing economic system and administrative capabilities.
Presentation on Sources Of Revenue For GovernmentShubham Saraf
The government collects revenue from various tax and non-tax sources. Tax revenue includes items like income tax of Rs. 1,72,026 crores, corporation tax of Rs. 359,990 crores, and service tax of Rs. 82,000 crores. Non-tax revenue consists of items such as interest receipts, dividends, grants, and income from public enterprises totaling Rs. 125,435 crores. Capital receipts include borrowings, recoveries of loans, and small savings deposits totaling over Rs. 500,000 crores in 2011-12.
The document summarizes Pakistan's fiscal policy and economic performance in recent years. It notes that Pakistan experienced serious macroeconomic imbalances in FY2007-08. To address this, the government passed a Fiscal Responsibility and Debt Limitation Act in 2005 requiring adherence to fiscal targets. The document reviews Pakistan's fiscal performance in FY2007-08 and projections for FY2008-09, including projections that the fiscal deficit will decline to 4.2% of GDP in 2008-09 from 7.4% in 2007-08. It also discusses trends in revenues, expenditures, debt levels, and the government's efforts to reform taxation policies to generate more sustainable revenues.
This document discusses India's fiscal policy from 1950-1991 and 1991-2008. During 1950-1991, fiscal policy focused on using taxes to fund large public sector investments. Tax rates were very high. Deficits increased over time. From 1991-2008, economic reforms reduced tax rates and trade barriers. Fiscal responsibility acts aimed to reduce deficits. Tax reforms expanded the base. Indirect tax reforms simplified rates. Deficits declined from reforms but debt levels remained high.
The revenue and expenditure of india,fiscal policyHuma Ansari
• Revenue – sources of revenue
• Tax revenue and non tax revenue
• Union budget analysis
• Expenditure of government
• Need, types, objectives of government expenditure
• What is fiscal policy
• Concept and types of fiscal policy
• Different measures to control fiscal deficit
Governments require public revenue to fund functions that promote social and economic welfare. The main sources of public revenue are taxes, fees, and grants. Taxes are compulsory payments made to the government without direct benefits. Around 25% of tax revenue comes from direct taxes on income and 75% from indirect taxes like sales tax. Governments also generate non-tax revenue through fees for services. Grants are financial assistance provided by other governments or organizations. Governments use public revenue to fund spending on areas like health, education, defense, and infrastructure to achieve economic and social objectives.
Fiscal policy deals with the government's budgeting of revenues and expenditures. It aims to promote economic growth and development through public projects and welfare programs. Public finance concerns the income and spending of public authorities and aims to balance the two. Taxes are a compulsory contribution imposed on citizens in return for which no direct benefit is provided. The key canons of taxation are equity, certainty, convenience, and minimizing costs. Direct taxes are paid directly by taxpayers while indirect taxes may be passed on to consumers. Fiscal policy uses government spending and tax programs to influence aggregate output, employment and prices in the economy.
Fiscal policy refers to changes in government spending and taxes to achieve economic goals like low unemployment, stable prices, and economic growth. It involves tools like public debt, spending, taxes, and deficit financing. Expansionary fiscal policy increases spending or cuts taxes to boost aggregate demand, while contractionary policy reduces spending or raises taxes. Discretionary policy deliberately changes policy, while automatic policy changes without further action. Fiscal policy aims to shift the aggregate demand curve under Keynesian theory, but critics argue it may be crowded out by higher interest rates or future tax hikes under new classical views. Implementation lags mean its effects may not match original goals. Supply-side policy cuts marginal tax rates to incentivize more work
This paper investigates the relationship between tax structures and economic growth in a panel of developed and developing countries, using the new ICTD GRD. It sought to understand the effects of tax structure on GDP growth, since many previous studies have only focused on OECD countries.
It is also motivated by the IMF Policy prescription (IMF 2011), of on-going shift from reliance on trade taxes to VAT, especially in low income countries. It further sought to understand the implications of such structural shifts with studies showing that revenue recovery following trade liberalisation has been poor in low- and middle- income countries (Baunsgaard & Keen, 2010).
Results suggest that shifts away from trade and consumption toward income taxes have had a negative impact on GDP growth rates in developing countries. This negative effect is of greater magnitude through personal income taxes (PIC). Consequently, this study provides new evidence of potentially harmful effect of trade liberalisation on the GDP growth rates. The study also gives a clear picture of low tax reliance on indirect taxes between in low-income countries.
Revenue neutral shifts away from trade taxes to consumption taxes have no negative effect on growth. However, revenue neutral shifts towards income, specifically personal income taxes are potentially harmful to GDP growth rates. Key findings hold following the exclusion of resource-rich countries and after controlling for degree of openness.
The document discusses Pakistan's fiscal policy. It notes that fiscal policy involves the government using tax revenue and public expenditures to achieve economic objectives like growth and stability. However, Pakistan has faced fiscal deficits in recent years due to high non-development spending on areas like defense and debt interest. This is compounded by a lower tax collection as a result of tax evasion and lower industrial productivity. To improve its fiscal position, Pakistan needs measures like increasing tax rates, broadening the tax base, and reducing non-essential expenditures.
Public revenue refers to the income received by the government from various sources and is divided into tax revenue and non-tax revenue. Tax revenue includes direct taxes like income tax and corporate tax, as well as indirect taxes like excise duty, customs duty, VAT, and sales tax. Non-tax revenue consists of administrative revenues from fees, fines, and penalties as well as commercial revenues from public enterprises and borrowings. Public revenue is an important concept in public finance and provides funds for the government to offer common benefits to citizens.
The document discusses fiscal policy and taxation systems. It provides information on group members working on the topic of fiscal policy for development. It then defines fiscal policy and its objectives, such as employment expansion and economic growth. The document also distinguishes between direct and indirect taxes and provides tax revenue statistics for different country groups. It notes problems that developing countries face and factors that influence a country's taxation potential. Finally, it provides brief descriptions of different types of taxes, such as personal income tax, property tax, and corporate income tax.
Taxation, Private Fixed Domestic investment Behaviour and Zimbabwe’s Economic...AJHSSR Journal
This document summarizes a research paper that examines the relationship between taxation, private fixed domestic investment, and economic growth in Zimbabwe from 1998 to 2015. The paper finds that taxation revenue channeled towards productive public expenditures like infrastructure can stimulate private investment. However, Zimbabwe's high taxes have discouraged savings and investment, despite evidence that taxes can be efficient and equitable when properly implemented. The primary challenge for policymakers is devising tax rules that lower evasion and corruption while adequately protecting the tax base and lessening the burden on firms.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
The document summarizes key fiscal developments in India, including trends in central government receipts and expenditures. Some of the key points include:
- Tax revenues grew at a rate of 12.1% of GDP in 2018-19, with improvements in direct tax collection. However, indirect tax revenues fell slightly due to shortfalls in GST collections.
- Non-tax revenues exceeded budget estimates for 2018-19, helped by higher dividends and profits. Disinvestment receipts also exceeded targets through various instruments.
- Expenditure has been rationalized through moderation of subsidies and initiatives to improve efficiency in the defense sector. Capital expenditures have increased as a proportion of GDP.
- Fiscal
This document defines key terms related to fiscal policy such as bond yield, budget deficit, cyclical fiscal deficit, direct and indirect taxation, national debt, and structural fiscal deficit. It then discusses what fiscal policy is, how it involves taxation, spending, and borrowing to affect aggregate demand. Changes to fiscal policy can impact both aggregate demand and supply. The document also provides breakdowns of UK government spending and revenues, and discusses different types of taxes and their progressiveness.
This document provides an overview of macroeconomics concepts related to fiscal policy in Pakistan. It discusses key topics like the objectives, instruments, and impact of fiscal policy. It notes that Pakistan is facing budget shortfalls due to high government spending, lower tax revenues, and factors like tax evasion. To avoid increasing fiscal deficits, the document suggests that Pakistan could impose new taxes, increase utility prices, and decrease development spending.
The document discusses key aspects of government budgets including:
- Budgets show estimated annual receipts and expenditures and are divided into revenue and capital components.
- Objectives include reallocating resources, managing public enterprises, and promoting economic stability.
- Receipts are classified as revenue or capital, and expenditures are classified as revenue or capital.
- Budgets can be balanced, in surplus, or in deficit depending on a comparison of estimated receipts to expenditures.
- Deficits include revenue deficit, fiscal deficit, and primary deficit, with fiscal deficit being the broadest measure of imbalance.
An investigation of the effect of vat on revenue profiles of south western ni...Alexander Decker
This document summarizes a study that examined the effect of Value Added Tax (VAT) on the revenue profiles of state governments in Southwestern Nigeria from 2002 to 2011. The study used secondary data from approved budgets of five states. Panel regression analysis found that VAT had a positive and significant relationship with state revenues. The study concluded that increasing consumption through poverty alleviation could increase VAT revenues for states by boosting the goods and services subject to VAT.
Fiscal policy! Pakistan Budget 2013 to 2014Rahma Haseeb
The document discusses fiscal policy and Pakistan's government budget, including details on revenue collection from taxes, government expenditures, the types of fiscal policy, and an overview of the 2013-2014 budget which aimed to reduce the fiscal deficit while increasing tax revenue and containing inflation. It also provides information on the National Finance Commission Awards which determine the distribution of financial resources between the federal and provincial governments.
The document discusses sources of government revenue and goods/services provided by governments. It notes that local governments primarily rely on property taxes, while state governments rely mainly on sales and income taxes. The largest sources of federal government revenue are individual income taxes, payroll taxes, and corporate income taxes. It also explains that while some goods and services could potentially be provided privately, governments provide them because they benefit society as a whole.
The document discusses four key functions of public finance: allocation, distribution, stabilization, and growth. It also discusses principles for evaluating a good tax system, including revenue adequacy, stability, simplicity, tax neutrality, economic efficiency, and low administration and compliance costs. The document compares tax systems before and after reforms, noting the need to tailor reforms to a country's existing economic system and administrative capabilities.
Presentation on Sources Of Revenue For GovernmentShubham Saraf
The government collects revenue from various tax and non-tax sources. Tax revenue includes items like income tax of Rs. 1,72,026 crores, corporation tax of Rs. 359,990 crores, and service tax of Rs. 82,000 crores. Non-tax revenue consists of items such as interest receipts, dividends, grants, and income from public enterprises totaling Rs. 125,435 crores. Capital receipts include borrowings, recoveries of loans, and small savings deposits totaling over Rs. 500,000 crores in 2011-12.
The document summarizes Pakistan's fiscal policy and economic performance in recent years. It notes that Pakistan experienced serious macroeconomic imbalances in FY2007-08. To address this, the government passed a Fiscal Responsibility and Debt Limitation Act in 2005 requiring adherence to fiscal targets. The document reviews Pakistan's fiscal performance in FY2007-08 and projections for FY2008-09, including projections that the fiscal deficit will decline to 4.2% of GDP in 2008-09 from 7.4% in 2007-08. It also discusses trends in revenues, expenditures, debt levels, and the government's efforts to reform taxation policies to generate more sustainable revenues.
This document discusses India's fiscal policy from 1950-1991 and 1991-2008. During 1950-1991, fiscal policy focused on using taxes to fund large public sector investments. Tax rates were very high. Deficits increased over time. From 1991-2008, economic reforms reduced tax rates and trade barriers. Fiscal responsibility acts aimed to reduce deficits. Tax reforms expanded the base. Indirect tax reforms simplified rates. Deficits declined from reforms but debt levels remained high.
The revenue and expenditure of india,fiscal policyHuma Ansari
• Revenue – sources of revenue
• Tax revenue and non tax revenue
• Union budget analysis
• Expenditure of government
• Need, types, objectives of government expenditure
• What is fiscal policy
• Concept and types of fiscal policy
• Different measures to control fiscal deficit
Governments require public revenue to fund functions that promote social and economic welfare. The main sources of public revenue are taxes, fees, and grants. Taxes are compulsory payments made to the government without direct benefits. Around 25% of tax revenue comes from direct taxes on income and 75% from indirect taxes like sales tax. Governments also generate non-tax revenue through fees for services. Grants are financial assistance provided by other governments or organizations. Governments use public revenue to fund spending on areas like health, education, defense, and infrastructure to achieve economic and social objectives.
Fiscal policy deals with the government's budgeting of revenues and expenditures. It aims to promote economic growth and development through public projects and welfare programs. Public finance concerns the income and spending of public authorities and aims to balance the two. Taxes are a compulsory contribution imposed on citizens in return for which no direct benefit is provided. The key canons of taxation are equity, certainty, convenience, and minimizing costs. Direct taxes are paid directly by taxpayers while indirect taxes may be passed on to consumers. Fiscal policy uses government spending and tax programs to influence aggregate output, employment and prices in the economy.
Fiscal policy refers to changes in government spending and taxes to achieve economic goals like low unemployment, stable prices, and economic growth. It involves tools like public debt, spending, taxes, and deficit financing. Expansionary fiscal policy increases spending or cuts taxes to boost aggregate demand, while contractionary policy reduces spending or raises taxes. Discretionary policy deliberately changes policy, while automatic policy changes without further action. Fiscal policy aims to shift the aggregate demand curve under Keynesian theory, but critics argue it may be crowded out by higher interest rates or future tax hikes under new classical views. Implementation lags mean its effects may not match original goals. Supply-side policy cuts marginal tax rates to incentivize more work
This paper investigates the relationship between tax structures and economic growth in a panel of developed and developing countries, using the new ICTD GRD. It sought to understand the effects of tax structure on GDP growth, since many previous studies have only focused on OECD countries.
It is also motivated by the IMF Policy prescription (IMF 2011), of on-going shift from reliance on trade taxes to VAT, especially in low income countries. It further sought to understand the implications of such structural shifts with studies showing that revenue recovery following trade liberalisation has been poor in low- and middle- income countries (Baunsgaard & Keen, 2010).
Results suggest that shifts away from trade and consumption toward income taxes have had a negative impact on GDP growth rates in developing countries. This negative effect is of greater magnitude through personal income taxes (PIC). Consequently, this study provides new evidence of potentially harmful effect of trade liberalisation on the GDP growth rates. The study also gives a clear picture of low tax reliance on indirect taxes between in low-income countries.
Revenue neutral shifts away from trade taxes to consumption taxes have no negative effect on growth. However, revenue neutral shifts towards income, specifically personal income taxes are potentially harmful to GDP growth rates. Key findings hold following the exclusion of resource-rich countries and after controlling for degree of openness.
The document discusses Pakistan's fiscal policy. It notes that fiscal policy involves the government using tax revenue and public expenditures to achieve economic objectives like growth and stability. However, Pakistan has faced fiscal deficits in recent years due to high non-development spending on areas like defense and debt interest. This is compounded by a lower tax collection as a result of tax evasion and lower industrial productivity. To improve its fiscal position, Pakistan needs measures like increasing tax rates, broadening the tax base, and reducing non-essential expenditures.
Public revenue refers to the income received by the government from various sources and is divided into tax revenue and non-tax revenue. Tax revenue includes direct taxes like income tax and corporate tax, as well as indirect taxes like excise duty, customs duty, VAT, and sales tax. Non-tax revenue consists of administrative revenues from fees, fines, and penalties as well as commercial revenues from public enterprises and borrowings. Public revenue is an important concept in public finance and provides funds for the government to offer common benefits to citizens.
The document discusses fiscal policy and taxation systems. It provides information on group members working on the topic of fiscal policy for development. It then defines fiscal policy and its objectives, such as employment expansion and economic growth. The document also distinguishes between direct and indirect taxes and provides tax revenue statistics for different country groups. It notes problems that developing countries face and factors that influence a country's taxation potential. Finally, it provides brief descriptions of different types of taxes, such as personal income tax, property tax, and corporate income tax.
Taxation, Private Fixed Domestic investment Behaviour and Zimbabwe’s Economic...AJHSSR Journal
This document summarizes a research paper that examines the relationship between taxation, private fixed domestic investment, and economic growth in Zimbabwe from 1998 to 2015. The paper finds that taxation revenue channeled towards productive public expenditures like infrastructure can stimulate private investment. However, Zimbabwe's high taxes have discouraged savings and investment, despite evidence that taxes can be efficient and equitable when properly implemented. The primary challenge for policymakers is devising tax rules that lower evasion and corruption while adequately protecting the tax base and lessening the burden on firms.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
Keywords: Direct tax, Indirect tax, Medium enterprise, Productive expenditure, tax evasion, tax impact.
Submission to the International Monetary Fund's Consultation on Economic "Spi...Dr Lendy Spires
This document provides recommendations from ActionAid International to the IMF's consultation on international tax spillovers. Key points include:
1) International tax reforms should consider macroeconomic impacts and inter-nation equity, not just domestic revenue impacts. Broader effects on financial stability, debt management, and development policy coherence should be analyzed.
2) The IMF is well-placed to develop methodologies for quantifying tax spillovers between countries from changes to domestic tax regimes. Baseline measurements of the international distribution of the corporate tax base would aid future assessments.
3) Reforms aimed at preventing base erosion and profit shifting should explicitly protect lower-income countries' tax bases and rights. Measures permitting source-based
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Effect of vat and tax on economy an analysis in the context of bangladesh.Alexander Decker
This document summarizes a research paper on the effects of taxes and VAT on the economy of Bangladesh. It provides background on VAT and how it has replaced sales taxes in Bangladesh. It discusses the country's current tax policies, including income tax rates that are progressive up to 25% and a uniform 15% VAT rate. It analyzes how the tax system affects people in Bangladesh, noting the heavy reliance on indirect taxes results in a small number of taxpayers shouldering the burden. The narrow tax base and exemptions are also issues. In conclusion, broadening the tax base is desirable but agricultural income exemptions need reconsideration given many affluent people claim agricultural income to avoid taxes.
Tax system in nigeria – challenges and the way forwardAlexander Decker
This document discusses challenges facing Nigeria's tax system. It outlines several key challenges: lack of statistical tax data, inability to prioritize tax efforts, poor tax administration due to understaffing and lack of training, and multiplicity of taxes. The document examines these challenges in more detail and argues that addressing these issues is important for establishing an efficient and effective tax regime in Nigeria.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Tax Elasticity, Buoyancy and Stability in ZimbabweIOSR Journals
The document analyzes tax elasticity, buoyancy, and stability in Zimbabwe from 2000-2013. It finds that Zimbabwe relies heavily on tax revenue to fund government spending. Using traditional regression and dummy variable approaches, the study calculates Zimbabwe's tax buoyancy at over 1, implying the tax system responds to income growth. Tax ratios varied over the period but generally increased after dollarization, reaching a peak of 40.2% in 2005. Several tables show tax performance and revenue by tax type. The document also analyzes Zimbabwe's many parastatals across various sectors and their inefficiencies that have led to losses.
A Logit Model of Informal Traders’ Decision to Evade Tax: A Case of Zimbabweiosrjce
Taxation is the commonest and oldest source of government revenue in the world. The main reason
for taxation is to finance government expenses and redistribute of wealth. The shadow economy and tax evasion
are both widespread in Zimbabwe. When the taxation system is not effective, many economic agents will use this
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Tax expenditure in sub saharan africa the nigerian experience.
1. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 7, 2012
Tax Expenditure in Sub Saharan Africa: The Nigerian Experience
Fakile, Adeniran Samuel* Adegbie, Festus Faboyede, Olusola Samuel
College of Development Studies, Covenant University, Ota, Nigeria.
*E-mail: adfak70@yahoo.com
Abstract
The Nigerian government established the National Economic Empowerment and Development Strategies
(NEEDS) in 2003 to achieve its trade policy of which the reform of Nigeria Custom Services is one of the major
functions. Over the years, custom and excise duties have been major sources of revenue apart from crude oil.
However, the problems of corruption, fraud and malpractices together with inefficiencies and ineffectiveness in
operations have hindered the desire to contribute maximally to the economic development of the nation. The
central objective of trade policy was to provide protection for domestic industries and reduce the perceived
dependence on imports; reduce level of unemployment and generate more revenues from the non-oil sector,
hence tariffs on raw materials and intermediate capital goods were scaled down. Duty exemptions and
concessions remain some of the quantitative policy instruments for attracting investment and boost domestic
production. This paper will review; discuss Tax Expenditure and the Nigerian experience, especially on loss of
revenue from customs.
Keywords: Custom duties, Revenue, Duty exemptions, Domestic production, Development.
Introduction
The provision of public services and infrastructure is a key factor for economic development and growth. Many
developing countries fail to raise the tax revenue required to finance their public sectors. Domestic revenue
mobilization in sub-Saharan Africa (SSA) is generally weak in comparison to other parts of the world. Excluding
revenues from natural resources such as oil, which are cyclical, tax revenues in SSA averaged about 14 percent
of GDP in 2005, only slightly higher than the 13 percent of GDP in 1980 (Keen and Mansour, 2009).
Tax 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. 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.
Tax incentives are popular policy measures used in both high- and low- income countries, but there are
differences in how high-income and low-income countries deal with them. The high- income countries (most of
them Organization for Economic Cooperation and Development (OECD) member states) recognize that a tax
incentive is a type of government spending in the form of a tax expenditure. A tax expenditure, a component of the
tax system, functionally provides government financial assistance by not collecting tax revenue otherwise due.
High- income countries have introduced tax expenditure accounting and subject tax expenditures to normal
budgetary controls. (Swift, 2006)
Many low-income countries, even those with high public debt and those in which the majority of the
population is below the poverty line (less than US$1 a day), have embraced tax incentives. Their spending in tax
expenditures has decreased their revenue received, reducing these countries’ capacity to assist the needs of the
poor. Ironically, the poor do not benefit from tax incentives because their income is usually below the tax
thresholds. None of these countries, so far, use tax expenditure accounting or subject tax expenditures to normal
budgetary control. Many other transition economies and developing nations also use tax incentives, but in most
cases they have not taken sufficient steps to make tax incentives accountable (Swift, 2006).
Definition
While tax revenue mobilization can be weak due to tax evasion or tax avoidance, it may also be negatively
affected by policy measures like the introduction of tax expenditures, which deliberately reduce the tax burden
on certain economic activities or taxpayers. Tax expenditures are usually defined as deviations from a
benchmark tax system which give rise to tax revenue losses, tax expenditures are simply misclassified. They
appear to be reduction in taxes, but they are equivalent to cash spending.
Political Economy of Taxation in Africa
The political economy of the countries of SSA is complex and heterogeneous, but to a greater or lesser extent,
the distribution of patronage by political elites using public resources is integral to the political process in most
countries. Resources for patronage can be obtained from both sides of the budget; from public expenditures or
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ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 7, 2012
revenues. The most important channels through which resources for patronage are obtained from the tax system
are twofold. First, tax concessions, such as income tax holidays or import duty exemptions, are granted to
politically favoured companies on a selective basis, in circumstances where there is no strong objective rationale
for granting tax incentives. Although this is often not illegal, it is usually done in a very untransparent manner. In
many countries, large taxpayers, such as major companies, are more likely to bargain directly with government
for tax concessions which favour them individually, rather than for groups of taxpayers representing common
interests (e.g. the business sector) to bargain for changes in taxes which would benefit themselves collectively,
and which would be transparent (Fuest and Riedel, 2009).
Visibility and control
One way of looking at tax expenditures is to see them as public expenditures. Just as ‘normal’ public
expenditures, tax expenditures may or may not be justifiable by economic policy objectives like income
redistribution or the correction of market failures. However, tax expenditures differ from direct government
expenditures in a number of ways. In particular, they are frequently less visible and less clearly integrated into
the budgetary process. For these reasons, there is widespread concern that tax expenditures are more difficult to
control, more vulnerable to capture by lobby groups or even corruption and therefore more likely to lead to
budget imbalances and governance problems than direct government expenditures. Since issues of fiscal
transparency and political accountability are particularly pressing in developing countries, tax expenditures may
be particularly problematic in these countries. Moreover, since tax expenditures lead to more complicated tax
systems, there is a concern that tax expenditures might encourage tax avoidance and tax evasion.
What makes tax expenditures different from other forms of government spending?
The government uses tax expenditures and direct spending for the same purposes, but tax expenditures receive
different treatment in two key ways. Most tax expenditures are not subject to the same annual appropriations
process as other forms of spending. This means they are less likely to be scrutinized. Second, tax expenditures
appear to be tax cuts instead of spending because they transfer funds to businesses and individuals through tax
subsidies. It is therefore generally easier to win votes for tax expenditures than direct spending.
Tax Incentives for Foreign Direct Investment
Among the various types of tax expenditures existing in developing countries, tax incentives for foreign direct
investment, have received most attention. Many developing countries use special tax incentives like tax holidays,
investment allowances, free enterprise zones or tax sparing provisions. Again, little statistical information on the
level of existing investment incentives and their development over time is available. But a dataset recently
collected by Keen and Mansour (2008), which covers 40 Sub-Saharan African countries does suggest that the
use of tax incentives for investment has increased over the last decades. For instance, in 1980, only one among
the 29 countries for whom data is available for this year offered free zones, i.e. zones where special corporate
income tax treatment is offered. In 2005, almost half of the countries covered by the dataset offered this type of
incentives. Table 1 gives an overview over the different types of tax incentives reported by Keen and Mansour
(2008) and their change over time. In the literature, the growing use of tax incentives for investment in
developing countries is criticized for various reasons. One issue is that these tax incentives reduce corporate
income tax revenue (Bird (2008), Klemm (2009)).
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ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 7, 2012
Table 1
Investment Tax Incentives in sub-Saharan African Countries 1980 and 2005
1980 2005
Number of Total Ratio Number of Total Ratio
Countries Number of (1)/(2) Countries Number of (1)/(2)
Offering Countries Offering Countries
Incentives (I) (2) Incentives (I) (2)
Tax Holidays 13 29 0.45 27 39 0.69
Reduced CIT 3 29 0.1 20 39 0.51
Rates
Investment 17 29 0.59 22 39 0.56
Allowances
Incentives for 3 29 0.1 11 39 0.28
Exports
Free Zones 1 29 0.03 18 39 0.46
Investment 9 29 3.1 29 39 0.74
Code
Source: Keen and Mansour (2008)
Tax expenditures in Nigeria
Nigerian government considers trade as the main engine of its development strategies because of the implicit
belief that trade can create jobs, expand markets, raise incomes, facilitate competition and disseminate
knowledge. According to world trade organization, the main trust of trade policy is the enhancement of
competitiveness of domestic industries, with a view to stimulate local value-added and promoting a diversified
export trade. Trade policy also seeks to create an environment that is conducive to increased capital inflows, and
transfers and adoption of appropriate technologies. The Nigerian Government has put in place a number of
investment incentives for the stimulation of private sector investment from within and outside the country. While
some of these incentives cover all sectors, other are limited to some specific sectors. The nature and application
of these incentives have been considerably simplified. Duty exemptions and concessions remain some of the
quantitative policy instruments for affecting trade policy in favour of domestic industries and to achieve the aim
of diversifications.
The Nigerian Customs was established in 1891 whose powers and functions are spelt out in the customs and
management Act (CEMA) cap 84 of the laws of the Federation, 1990.The main function of the service is the
collection of customs and excise duties on goods. It is in charge of trade facilitation and generation of trade
statistics for planning purposes as well as the main coordinator of anti-smuggling operations at the sea port,
airports and border stations. The service works closely with other institutions like the Central Bank of Nigeria, the
Nigerian Ports Authority, the Military and the Economic Community of West African States (ECOWAS)
secretariat. The Nigerian Custom Services ensures the security of International trade supply chain and combat
international crime in conjunction with other members of the World Customs Organization (Buba,2007). The
Customs is indeed very important to the economy as it collects import duties, excise duties, fees, tariffs and other
levies imposed by the Federal Government on imports, exports and statutory rates. After oil, the customs provide
the largest single chunk of revenue accruing to the federation account.
The Nigerian Customs Service is much criticized for alleged corruption and inefficiency and its upper
echelon is often with intrigue and in fighting. Nigeria is an import-dependent nation and the country is awash with
imports from all parts of the world. There is problem of sharp practices that collectively deprived the government
of revenue and enriched some corrupt customs men and their collaborators (Adegbie and Fakile, 2011). There is
under-assessment of payable duties, unauthorized transfer of funds, abuse of waivers, concessions and exemptions
as well as non-remittance of government revenues.
The table 2 below shows the summary of duty loss to all concessions between January 2004 and November
2006.From the table, revenue loss in 2004 was N56.8billion which increased to N71.2billion in 2005 and reduced
to N54.9billion in 2006.This is an evidence to show that the government is losing much revenue annually which
will definitely affect negatively, provision of necessary needs for the growth and development of Nigerian
economy. With so much outflows of income in billions of naira, the policy adopted by the government in the
concession needs to be reviewed more so if the sectors that enjoy the concessions are not given much back to the
economy. Most of the manufacturing companies that enjoy the waivers are not operating at full capacity while
some are closing businesses for neighboring West African Countries. Some have actually been liquidated for
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ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 7, 2012
inability to continue in business (Adegbie, 2011). If these have characterized the manufacturing industry, then
where are the companies that enjoyed the waivers and concessions?
Table 2: Revenue Loss by Nigerian Customs Services from 2004 – 2006 in Naira
SN Exemption/Concession 2006 2005 2004
N N N
1. Revenue loss due to 18,237,049,659.54 41,636,157,785.94 33,970,745,310.37
exemption /waivers
2. Revenue loss due to 1,494,223,772.13 2,548,734,595.82 2,104,089,331.98
ETLS
3. Revenue loss due to 564,956,189.29 10,001,804,163.24 6,982,047,350.65
concessionary Duty rate
granted bonafide
Manufacture/Assemblies
4. Revenue loss due to 256,055,157.07 248,545,281.21 146,279,457.67
export Processing/excise
factory
5. Revenue loss due to 3,819,378.39 820,147,347.45 1,115,233,719.64
concessions to
Manufacture-In-Bond-Sche
mes (MIBS)
6. NDCC 34,365,839,307.46 15,989,292,537.74 11,478,137,655.38
TOTAL 54,921,943,464.88 71,244,681,711.40 56,796,532,825.67
Source: Adapted from Buba, (2007)
Of interest is another case of $3 billion (N488 billion) waiver granted to a Chinese firm, WEMPCO, to
encourage them set up a $250 million Cold Rolled Steel Plant, which was thoroughly abused. Tens of billions
were lost to waivers for sugar, cement, and rice imports and what not, Daily Trust (2011). It was discovered that
in 2011 alone, a colossal N37.2 billion was lost as a result of import waivers that were granted to importers of
raw materials in that year alone. Nigeria Customs Service records have shown that the nation lost N276.9 billion
between 2000 and 2008. House of Representatives investigation in 2009 into waivers granted by federal
government said that the government was yet to abate the practice of granting “illegal and indiscriminate”
waivers to “totally undeserving” firms and individuals, despite repeated orders from the House that the policy be
discontinued Nigerian National News (2012).
The Effects of Tax Expenditures on the Budget
Tax expenditures, as spending items, affects fiscal budget balance, prioritizing resource allocation,
efficiency and cost-effectiveness. The impact of tax expenditures on the budget is as discussed below.
(1) Tax expenditures have not been integrated into the budget process for appropriation. There is no
requirement to coordinate them with respective budget allocations. As a result, some tax expenditures overlap,
are redundant, or conflict with budget spending and objectives.
(2) Tax expenditures, in reducing tax revenue received (or net tax revenue), reduce the overall budget balance
like direct expenditures. As a result, the overall budget deficit will increase or the overall budget surplus will
decrease if direct expenditures are constant.
(3) Even though the main concerns in many developing countries are economic growth and poverty reduction,
tax expenditures have a higher priority than direct expenditure programs for infrastructure, economic growth,
education, health, poverty reduction, and so forth. Most poor people do not benefit from tax expenditures
because their incomes are below tax thresholds.
(4) Tax expenditures may provide an opportunity for abuse by government officials and legislators either for
self enrichment or to provide benefits to favored interests. Tax expenditures have a direct and often large cash
value to potential recipients. Consequently, companies and business groups have a strong motivation to lobby for
tax incentives by exaggerating the prospective economic or social benefits. These lobbying activities often lead
to a proliferation of tax expenditures and undermine spending efficiency and fiscal accountability. Also, the
direct cash value of tax expenditures can become an open inducement to bribery and corruption.
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5. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 7, 2012
Conclusion
Integrating tax expenditures into the budget process and subjecting them (and all other spending) to effective
legislative controls could improve the efficiency of government and soften the blow from the belt tightening that
is necessary if we are to avoid a debt crisis. Reductions in tax expenditures could simplify the income tax and
make it less prone to abuse, especially if part of the revenues from the trimmed tax expenditures were used to cut
marginal income tax rates. That is, controlling tax expenditures might increase the chances of enacting badly
needed tax reform.
One issue is that the cost of tax incentives may be greater than expected because of tax avoidance schemes
set up to exploit them. Moreover, it is difficult to distinguish genuine Foreign Direct Investment from
domestic-source investment because round tripping’ may occur, where domestic capital is routed offshore and
then brought back as foreign investment. Therefore government should discourage tax incentives granted to
attract FDI, especially tax holidays. In addition, tax expenditures must be audited for performance and the
information must be published (with comprehensive analysis) to ensure fiscal transparency.
In our view, the government should: (1) make public all the production sharing agreements (PSAs) in the oil
sector and subject these to public review, with a view to eliminating the fiscal incentives provided, and to ensure
that all future PSAs are shared and debated publicly. (2)Undertake the promised review, which should be made
public, of all tax incentives with a view to reducing or removing many of them, especially those that involve the
exercise of discretionary powers by ministers. Those incentives that remain must be simple to administer and
shown by the government to be economically beneficial. (3) Provide on an annual basis, during the budget process,
a publicly available tax expenditure analysis, showing annual figures on the cost to the government of tax
incentives, and showing who the beneficiaries of such tax expenditure are.
References
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116
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