9th meeting of the Community of Practice on Tax Expenditures: tax incentives for investment

The ninth meeting of the Community of Practice on Tax Expenditures, held on 11 June 2026, brought together more than 80 participants to discuss one of the most debated areas of tax policy: tax incentives for investment. Moderated by Flurim Aliu (Council on Economic Policies), the session explored how governments can better design, implement, and monitor investments through practical guidance, legal reforms, and country experiences.

The meeting featured presentations from the OECD on new practical guidance and data tools, the International Institute for Sustainable Development (IISD) on tax incentives embedded in investment laws, and a country case study from Ghana on the country’s recent reform of its tax incentives regime.

 The Community of Practice on Tax Expenditures is a joint initiative between the ATI and the Tax Expenditures Lab.

OECD: practical guidance for better design of investment tax incentives 

Luisa Dressler, Senior Economist, and Sarah Dayan, Economist at the OECD presented the recently published Practical Guide to Investment Tax Incentives. Developed to support policymakers and practitioners in low- and middle- income countries, the guide provides practical advice across the entire policy cycle, from the initial design of tax incentives to their implementation, monitoring, and evaluation. 

The presentation focused on the design stage, highlighting that governments should first assess whether a tax incentive is necessary, whether it is the appropriate instrument to address the identified market failure, and whether is well suited to achieve its intended policy objectives. Where incentives are justified, they should be carefully designed to encourage additional investment while minimising costs and economic distortions, with effective monitoring and evaluation instruments built in from the outset.

The OECD also introduced its new Investment Tax Incentives Database, covering tax incentive regimes in more than 70 emerging and developing economies for the period 2022-2024. Launched during OECD Tax and Development Days 2026, the database provides detailed information on eligibility criteria, design features, and legal frameworks, allowing comparison across countries.

IISD: the role of tax incentives in investment laws

Josefina del Rosario Lago, Policy Analyst at IISD, presented the recent report Tax incentives in National Investment Laws, which analyses tax incentives contained in 105 investment laws across Africa, Asia, and Latin America and the Caribbean. The report examines how these laws interact with broader tax legislation and explores governance and coordination mechanisms throughout the policy cycle. 

One of the report’s key findings is that 68% of investment laws explicitly provide incentives, and that 94% of those are fiscal or tax-related, with tax holidays and rate reductions accounting for 75% as the main instruments used. Investment Promotion Agencies (IPAs) often drive the drafting of these investment laws, while ministries of finance typically play only a consultative role. This limited involvement can weaken fiscal oversight and coordination between investment and fiscal policies.

To strengthen governance and address the challenges identified, IISD recommended increasing the role of ministries of finance in decision-making, improving the sharing of tax expenditure data, introducing anti-cumulation rules to prevent investors from claiming multiple incentives, centralising approval processes, and incorporating sunset clauses and periodic reviews into investment legislation. 

Ghana: strengthening oversight through reform

Naa Lamle Orleans-Lindsay, Head of the Legal Department of the Ghana Investment Promotion Centre (GIPC), presented Ghana’s experience implementing the Exemptions Act of 2022. Before the reform, tax exemptions provisions were scattered across multiple laws and administered by different institutions, limiting transparency, oversight, coordination, and revenue mobilisation. The Exemptions Act introduced a more coherent framework with clearer eligibility criteria, standardised procedures, and stronger oversight by the Ministry of Finance. A central feature of de reform is its emphasis on monitoring, reporting, and accountability. 

According to the presentation, the new framework has strengthened both executive and parliamentary oversight, improved transparency, aligned tax exemptions more closely with national development priorities and contributed to increased revenue mobilisation.

Key discussion points 

The meeting concluded with an active Q&A session, during which participants reflected on common challenges faced by countries when designing and managing investment tax incentives. 

A recurring theme was the importance of monitoring and evaluation throughout the policy cycle, as it is essential for assessing if tax incentives deliver benefits that outweigh their fiscal costs. Participants also discussed the practical difficulties of measuring administrative, compliance, and litigation costs, highlighting the need for improved methodologies and analytical tools. 

The discussion further explored the trade-offs between providing certainty to investors and maintaining policy flexibility, as well as the importance of coordination, transparency, and clear eligibility criteria within legislation. Participants also emphasised that the debate should extend beyond the design of tax incentives to whether they attract the types of investment that support countries’ broader economic and development objectives. 

The exchange underscored the need to balance the objective of attracting investment with the protection of revenue mobilisation, and the importance of a joint perspective across tax administrations, ministries of finance, and investment agencies.