Fiscal Affairs Department How-To Notes

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Fiscal Affairs Department How-To Notes

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IMF Publications

Contents

• How to Combat Value-Added Tax Refund Fraud
  • Published: August 4, 2023
  • Summary: A previous IMF Working Paper on value-added tax (VAT) refunds (WP/07/31, by Keen and Smith) describes the main forms of VAT noncompliance and concludes that VAT is susceptible to evasion and fraud like any other tax.
• How to Design a Presumptive Income Tax for Micro and Small Enterprises
  • Published: June 29, 2023
  • Summary: Turnover taxes are prevalent in developing countries as a simple form of presumptive taxation of business income. Such simplified tax regimes can reduce the relatively high compliance costs of micro and small enterprises, which might otherwise discourage entrepreneurs from formalizing their activiti
• How to Make the Management of Public Finances Climate-Sensitive–“Green PFM”
  • Published: December 8, 2022
  • Summary: This How to Note develops the “green public financial management (PFM)” framework briefly outlined in an earlier Staff Climate Note (2021/002, published in August 2021).
• How to Evaluate Tax Expenditures
  • Published: November 2022
  • Summary: Governments use tax expenditures (TEs) to provide financial support or benefits to taxpayers. The budgetary impact of TEs can be similar to that of direct outlays: after the support is provided, less money is available to fund other government priorities.
• How to Design and Institutionalize Spending Reviews
  • Published: September 20, 2022
  • Summary: Spending reviews refer to the process of conducting in-depth assessments of existing public expenditure in order to identify opportunities to reduce or redirect spending from low-priority, inefficient, or ineffective spending.
• How to Manage Fiscal Risks from Subnational Governments
  • Published: September 1, 2022
  • Summary: Subnational governments can create sizable fiscal risks for central governments. In addition to impacting service delivery at the grassroots level, unsustainable subnational finances can be a continuous drain on central resources.
• How to Prepare Expenditure Baselines
  • Published: June 1, 2022
  • Summary: Expenditure baseline projections (hereafter, “base¬lines”) are a key analytical concept in budget preparation that refers to estimates of future expenditure on the assumption that current policies remain unchanged.
• How to Build Cash Management Capacity in Fragile States and Low-Income Developing Countries
  • Published: March 1, 2022
  • Summary: Fiscal institutional capacity in most fragile states (FS) and several low-income developing countries (LIDCs) is much lower than in other countries.
• How to Apply Excise Taxes to Fight Obesity
  • Published: December 10, 2021
  • Summary: Fighting the obesity epidemic has so far proven a difficult challenge, given the diversity of natural and processed foods, the complexity of food supply chains, and the fact that targeting excessive caloric consumption is far trickier than reducing overall consumption (as for tobacco).
• How to Assess Fiscal Risks from State-Owned Enterprises: Benchmarking and Stress Testing
  • Published: August 18, 2021
  • Summary: The size and operation of state-owned enterprises (SOEs) can imply significant risks for governments. SOEs are present in virtually every country in the world and are major players in domestic economies and in global markets.
• How to Manage Public Investment during a Postcrisis Recovery
  • Published: July 22, 2021
  • Summary: Public investment is likely to be an important component of any postcrisis recovery program. As countries work to ensure a smart, green, fair recovery, investing in modern, resilient, and efficient infrastructure assets will be key.
• How to Assess the Benefits of Nonperforming Loan Disposal in Sub-Saharan Africa Using a Simple Analytical Framework
  • Published: June 7, 2021
  • Summary: The coronavirus (COVID-19) crisis, which has hit financial systems across Africa, is likely to deteriorate banks’ balance sheets.
• How to Collaborate Effectively to Improve Data Quality and Use in Revenue Administration and Official Statistics
  • Published: May 10, 2021
  • Summary: This note outlines the interest of Revenue Administrations (RAs) and National Statistical Offices (NSOs) in the quality of data at their disposal, and how collaboration between these organizations can contribute to improving data quality.
• How to Manage Value-Added Tax Refunds
  • Published: May 10, 2021
  • Summary: The value-added tax (VAT) has the potential to generate significant government revenue. Despite its intrinsic self-enforcement capacity, many tax administrations find it challenging to refund excess input credits, which is critical to a well-functioning VAT system.
• How to Design a Regional Tax Treaty and Tax Treaty Policy Framework in a Developing Country
  • Published: May 4, 2021
  • Summary: A well-designed regional tax treaty to which developing countries are signatories will include provisions securing minimum withholding taxes on investment income and technical service fees, a taxing right in respect of capital gains from indirect offshore transfers, and guarding against-treaty shopp
• How to Design a Fiscal Strategy in a Resource-Rich Country
  • Published: March 9, 2021
  • Summary: This How to Note provides operational guidance for policymakers and IMF staff teams on designing—or revising—a fiscal strategy in resource-rich countries (RRC). Properly managed, resource revenue can support fiscal sustainability and development and equity objectives.
• How to Design a Fiscal Strategy in a Resource-Rich Country: Guidance Note on the Excel Template (v1.0)
  • Published: March 9, 2021
  • Summary: This guidance note describes how to use the Excel-based template developed by the Fiscal Affairs Department (FAD) of the IMF accompanying the note “How to Design a Fiscal Strategy in a Resource-Rich Country.” This template uses data inputs to generate simulations of fiscal policy dynamics.
• How to Develop A Framework for the Investment of Temporary Government Cash Surpluses
  • Published: December 21, 2020
  • Summary: Well-developed cash management aims to improve government operational efficiency and facilitates better service delivery by ensuring liquidity to meet payment obligations as they fall due. Liquidity, however, comes at a cost.
• How to Set Up A Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy
  • Published: December 21, 2020
  • Summary: Maintaining a cash buffer has emerged as a risk management tool for government cash and debt management. During budget execution, there is considerable cash flow volatility and timing mismatches concerning revenue collections and expenditures, debt inflows, and debt service.
• How to Operationalize IMF Engagement on Social Spending during and in the aftermath of the COVID-19 Crisis
  • Published: September 14, 2020
  • Summary: How to Operationalize IMF Engagement on Social Spending during and in the aftermath of the COVID-19 Crisis
• How to Design Subnational Fiscal Rules: A Primer
  • Published: February 25, 2020
  • Summary: This note discusses how to design subnational fiscal rules, including how to select them and calibrate them. It expands on the guidance provided at the national level on rule selection and calibration in IMF (2018a) and IMF (2018b).
• How to Design Tax Policy in Fragile States
  • Published: September 20, 2019
  • Summary: The purpose of this note is to provide a framework for improving tax policy design in fragile and conflict-affected states, which face political and institutional constraints.
• How to Design a Financial Management Information System: A Modular Approach
  • Published: May 15, 2019
  • Summary: A well-functioning financial management information system (FMIS) provides timely, reliable, and comprehensive reports that support implementation of the government’s fiscal policies and fiscal rules, and the formulating, controlling, monitoring, and executing of the budget.
• Tax Expenditure Reporting and Its Use in Fiscal Management : A Guide for Developing Economies
  • Published: March 27, 2019
  • Summary: This note aims to inform governments on how to account for tax expenditures and use that information in fiscal management.
• How to Organize Central Securities Depositories in Developing Markets: Key Considerations
  • Published: February 4, 2019
  • Summary: The key objective of this note is to support authorities in their decision making about the optimal organization of central securities depositories (CSDs) in their country.
• How to Control the Fiscal Costs of Public-Private Partnerships
  • Published: October 17, 2018
  • Summary: This note discusses what finance ministries can do to ensure that public-private partnerships (PPPs) are used wisely. By inviting private participation in infrastructure development and service provision, PPPs can help improve public services.
• How to Manage the Fiscal Costs of Natural Disasters
  • Published: June 11, 2018
  • Summary: This how-to note focuses on the management of the fiscal costs associated with natural disaster risks. Unlike other types of fiscal risks (for example, unexpected macroeconomic changes or materialization of contingent liabilities), a natural disaster presents a unique challenge to fiscal risk-manage
• How to Calibrate Fiscal Rules: A Primer
  • Published: March 15, 2018
  • Summary: This note provides guidance on how to calibrate fiscal rules, that is, how to determine the thresholds (ceiling, floor, or target) for specific fiscal aggregates constrained by rules. The note focuses, more specifically, on the calibration of the debt, balance, and expenditure rules.
• How to Select Fiscal Rules: A Primer
  • Published: March 15, 2018
  • Summary: This note provides guidance on how to select fiscal rules in a wide range of economies, including advanced, emerging market, and developing economies. The principles and methods discussed are intuitive and easy to implement, and leave room for policy judgment.
• How to Establish a Tax Policy Unit
  • Published: October 19, 2017
  • Summary: This paper explores that in developing economies, sufficient tax revenue is necessary to finance spending on health care, education, and infrastructure—all of which are prerequisites for economic growth and development.
• How to Strengthen the Management of Government Guarantees
  • Published: October 19, 2017
  • Summary: This note highlights commonly observed weaknesses in the management of government guarantees, good practices, and measures governments could take to strengthen: (i) the evaluation of guarantee proposals; (ii) the quantification of risks arising from guarantees and their mitigation; and (iii) the bud
• How to Adjust to a Large Fall in Commodity Prices
  • Published: January 7, 2017
  • Summary: Resource-rich countries have to manage highly volatile commodity revenues. In periods of revenue booms there is a tendency for large spending scale-ups. When facing large and persistent reductions in commodity prices, some of these countries will need to adjust their budgets to the new reality.
• How to Assess Fiscal Implications of Demographic Shifts: A Granular Approach
  • Published: January 7, 2017
  • Summary: Over the next few decades, the world will experience significant demographic shifts, with material fiscal implications. In many advanced and emerging market economies, aging populations will lead to higher spending on pensions and health care.
• How to Check Integrity of Fiscal Data
  • Published: January 7, 2017
  • Summary: The accuracy and reliability of government accounts and fiscal data is an issue in a number of countries, with significant and persistent discrepancies that can indicate underlying weaknesses in the country’s public financial management system.
• How to Design and Enforce Tobacco Excises?
  • Published: January 7, 2017
  • Summary: Taxing tobacco can help raise much needed revenue and save lives, but it needs to be done well. This “How-to” note provides guidance on the basics of tobacco taxation. How high should tobacco taxes be? Should we use ad valorem or specific taxes?
• How to Improve the Financial Oversight of Public Corporations
  • Published: January 7, 2017
  • Summary: Many studies have highlighted how failures of public corporations (otherwise known as state-owned enterprises) can result in huge economic and fiscal costs.