

Collaboration in action. Improving tax expenditure policy through regional engagement
This blog was also published by the Council on Economic Policies (CEP) and the Tax Expenditures Lab.
Governments world-wide, across all income groups, face mounting fiscal pressures and shrinking public budgets. Tax expenditures (TEs), i.e. benefits granted through the tax system to specific groups, sectors, or activities, continue to be one of the fiscal policy tools most used by governments. Yet, despite their economic significance – accounting for 3.8% of GDP and 23% of tax revenue on average world-wide – TEs are often not scrutinised with the same vigour as direct expenditures. In fact, the Global Tax Expenditures Database (GTED) shows that in 2024, 109 out of 218 jurisdictions do not publicly report on TEs.
The lack of transparency is not only reflected in the striking number of non-reporting countries, but also in the significant reporting gaps among those who do report. The Global Tax Expenditures Transparency Index (GTETI) – the first comparative assessment of TE reporting, covering countries worldwide, which provides a systematic framework to rank countries according to the regularity, quality, and scope of their TE reports – clearly shows that TE reporting practices need to significantly improve globally. According to the latest version of the GTETI, the average score across jurisdictions is 46 (out of a maximum of 100), and no country scores higher than 76.1, a clear indication that even best performing countries have significant room for improvement.
This is problematic, as transparent reporting is an essential step to ensure these public expenses deliver on their intended objectives (fostering equity, attracting investment, and boosting employment creation, and greening the economy), and do not undermine broader economic sustainability.
The importance of transparent reporting and rationalising the use of TEs has been recognised by members of the Addis Tax Initiative (ATI), a multi-stakeholder partnership currently comprising 76 member countries and organisations with the vision of tax systems that work for people and advance the Sustainable Development Goals (SDGs). In its ATI Declaration 2025, members commit to ensuring tax transparency by publishing TE reports regularly to facilitate cost-benefit assessments and ultimately helping to reduce the number of wasteful TE provisions. This commitment provided the framework for a regional workshop series on TEs, which the ATI initiated jointly with the Council on Economic Policies (CEP) and the German Institute of Development and Sustainability (IDOS) in 2022.
From July 2022 to May 2024, six workshops were held across three regions (West Africa, East Africa, and Asia). These workshops brought together officials from ministries of finance, revenue authorities, and parliaments from ATI partner countries. The primary objectives were to build capacity, facilitate knowledge transfer, and establish robust regional networks of TE experts.
The workshop series was supported by a wide range of institutional partners and partner country hosts, such as the African Tax Administration Forum (ATAF), the West African Tax Administration Forum (WATAF), the Economic Community of West African States (ECOWAS), the United Nations Development Programme (UNDP), the Asian Development Bank (ADB), the Federal Inland Revenue Service Nigeria (FIRS), the Kenya Revenue Authority (KRA), the Philippines’ Department of Finance (DOF), the Ministry of Finance Ghana, the Tanzania Revenue Authority (TRA), and the Inland Revenue Department (IRD) of Nepal.
Concept
The structure of the workshop series of the workshop series was divided into two parts and followed the so-called Tax Expenditures Policy Cycle, which illustrates the TE policy making process through a number of stages that are relevant per se and are highly interconnected (Figure 1). Each stage of the policy cycle was discussed and examined in different sessions, blending inputs from international and regional experts with country experiences from ATI partner countries.

The first part of the series consisted of three workshops in Nigeria, Kenya, and the Philippines which introduced core aspects of the different stages of the TE policy cycle such as data collection and processing, approaches to benchmarking and revenue forgone estimation, design of cost-benefit model, etc. Further, the first set of workshops provided an overview of good practices and standards to evaluate the effectiveness and efficiency of TE provisions, mapped pathways to reform, and initiated the set-up of regional TE networks for continued exchange and peer-level learning. Roughly one year later, participants from the same regions convened for technical follow-up meetings in Ghana, Tanzania, and Nepal for the second half of the series. These meetings allowed a deep dive into more technical issues around estimation, evaluation, and reporting. By engaging in practical hands-on exercises using data-driven examples, the participants further developed their capacities smoothly moving into the “How to” dimension of TE oversight and policy making. Another key goal of the second round of workshops was to consolidate the regional TE expert networks, which had been initiated over a year earlier. The depths of discussions, interactions, and debates during the follow-up meetings proved that his objective was achieved.
Impact
Since the start of the workshop series in July 2022, participating ATI partner countries showed some encouraging reforms relating to TEs:
- Five countries started reporting on TEs for the first time: Bangladesh, Georgia, Ghana, Togo, and Zambia. Bangladesh specifically acknowledges the support of ATI in the elaboration of its first tax expenditure report (p.2).
- The Maldives published their first stand-alone TE report. Up until 2024, TEs were reported as a subsection of the budget document.
- Benin improved its reporting quality by providing data on TEs at the provision level. Notably, Benin is one of the few ATI partner countries that evaluates its TEs and ranks among the top 10 in the GTETI. During the technical follow-up meeting for West Africa in 2023, Benin presented outcomes of a socio-economic evaluation of VAT exemptions on various basic commodities such as rice, gas, water, and electricity. The results led the government to eliminate certain exemptions and seek alternative measures to benefit the poor. A new evaluation looking at the time span 2022-2027 is planned.
- Another interesting experience is the manual on TE reporting which Pakistan’s Federal Bureau of Revenue (FBR) presented at the Asia workshop in 2024. This manual supports FBR staff in TE reporting training, which is vital given the high turnover rates. Following suggestions from the ATI Secretariat, CEP, and IDOS, the manual was adapted, shared with other participants, and featured on the Tax Expenditures Lab.
Many countries also undertook significant reforms regarding broader TE governance issues, a key area throughout the whole series of regional workshops.
- Liberia enacted a strategic framework for TE monitoring and evaluation, established a national monitoring and evaluation team consisting of three government institutions, and created a dedicated TE unit within the Revenue Authority to produce TE reports. Additionally, Liberia initiated measures to reduce TEs, for example, by implementing simple and transparent procedures for the administration of exemptions through fuel rebates. In 2023, Liberia also reported to integrate TE data into the models used by the Revenue Authority, enabling automatic generation of TE reports. In 2024, Liberia’s first stand-alone TE report with an updated methodology for estimating TEs was published. Before that, TE estimates were part of an annual budget report.
- In September 2022, Ghana passed the Exemptions Act, requiring the Ministry of Finance to prepare annual TE reports for parliament as part of the annual budget. These reports should cover granted exemptions, estimations of revenue forgone, justification of the alignment between granted exemptions and the economic management priorities of the government, and other matters that might affect the TE regime. The Exemptions Act also provides for TEs to be reviewed at least once every five years. The legislation was drafted with the support of international partners such as the Foreign, Commonwealth & Development Office (FCDO). In 2024, Ghana then published its first TE report under this act.
- During the technical follow-up meeting for East Africa in December 2023, Uganda requested advice on establishing a TE monitoring unit within the Uganda Revenue Authority (URA). In response, several resources and documents were provided to support the conceptualisation process. By August 2024, URA implemented a new organisational structure that includes a dedicated TE unit, marking a significant milestone as this is the first specialised unit of its kind within the authority.
- Zambia and Madagascar also reported significant progress in TE governance and transparency. In 2023, Zambia announced that plans are underway to establish a TE model and a cost-benefit analysis framework to ensure that TEs are reported and assessed before being granted. In the same year, Madagascar reported that following the first workshop attended in 2022, all TE reports are now publicly available on the Ministry’s website, marking an important step towards more TE transparency. Further, the coverage of Madagascar’s most recent TE report now extends to income and consumption taxes and includes local taxes, such as property taxes.
Way forward
While the workshop series ended in 2024 after providing a plenitude of interesting results and impulses, a lot remains to be done. TE evaluation is probably the area where the largest gap exists. Yet, TE governance and transparency are areas in which countries also need to improve considerably. Thus, building on the momentum created by the workshop series and the demand communicated by its participants, the ATI Secretariat, together with the Tax Expenditures Lab (a joint initiative by CEP and IDOS), launched the Community of Practice (CoP) on Tax Expenditures in October 2024. The main objective of the CoP is to provide all attendees from ATI partner countries as well as other interested parties a platform to continue engaging in discussions around TE estimation, evaluation, reporting, and reform which, in turn, would contribute to the much needed rationalisation of the use of TEs. In doing so, the CoP aspires to leverage the collective expertise of its members to enhance TE governance across ministries of finance, revenue administrations, parliaments, and beyond.
Since its launch in October 2024, two meetings took place which featured interesting presentations by Indonesia, Liberia, Benin, and the Tax Expenditures Lab team. More meetings are planned for 2025, with the next one taking place on 23 January at 13:00 CET. We encourage you to join this community by registering using this link.

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