Technical Notes and Manuals

Managing Tax Incentives in Developing Countries

By Miguel Pecho, Stoyan E Markov, Philip R Wood, Rachel Auclair, Fernando Velayos

November 21, 2024

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Format: Chicago

Miguel Pecho, Stoyan E Markov, Philip R Wood, Rachel Auclair, and Fernando Velayos. "Managing Tax Incentives in Developing Countries", Technical Notes and Manuals 2024, 007 (2024), accessed January 13, 2025, https://doi.org/10.5089/9798400289590.005

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Disclaimer: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This technical note sets out the essential elements to effectively manage tax incentives in developing countries, emphasizing the important role that revenue authorities must play in preventing abuses and revenue leakages. The note presents considerations for a risk-based compliance program on tax incentives that combines various supportive, preventative, and corrective practices and approaches. It also delineates key enablers, such as a whole-of-government approach, robust transparency and accountability practices, and a modern compliance risk management framework.

Subject: Compliance risk management, Revenue administration, Semi-autonomous revenue bodies, Special economic zones, Tax incentives, Taxes

Keywords: Compliance risk management, Customs authorities, Due diligence, Global, Governance, Managing tax incentives, Policy design, Policy design and legislation, Reporting obligation, Revenue authorities, Risk differentiation framework, Semi-autonomous revenue bodies, Special economic zones, Tax incentive risks, Tax incentives, Transparency and accountability, Views ofthe IMF, Whole-of-government approach

Publication Details

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