Taxing Better to Boost Growth
Fiscal Monitor
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Executive Summary
- Better tax design and implementation can strengthen growth while safeguarding the revenue governments need.
- Chapter 1 shows how tax reforms can reduce tax-induced distortions to support production, investment, innovation, and employment while preserving overall revenue.
- The chapter quantifies sizable gains from restoring VAT neutrality, improving the tax treatment of investment costs, strengthening work incentives, and targeting innovation support more effectively.
- The chapter also highlights how modern tax administration and clear legal frameworks can lower compliance costs, enhance firm productivity, and help ensure that well-designed reforms deliver in practice.
Quantified reform areas and expected gains
- Restoring VAT neutrality.
- Improving the tax treatment of investment costs.
- Strengthening work incentives.
- Targeting innovation support more effectively.
- Each area is presented as yielding sizable gains while preserving overall revenue (as described in Chapter 1).
Tax administration, legal frameworks, and implementation
- Modern tax administration can lower compliance costs.
- Clear legal frameworks can enhance firm productivity.
- Stronger tax administration and legal clarity help ensure that well-designed reforms deliver in practice.
Outreach and discussion (October 2026)
- "Taxing better to boost growth: Insights from the IMF’s Fiscal Monitor" — live discussion.
- Presentation of the Fiscal Monitor chapter: Shafik Hebous, Deputy Division Chief, Fiscal Affairs Department - International Monetary Fund.
- Panel discussion participants:
- Laura Alfaro, Chief Economist and Economic Counselor - Inter-American Development Bank.
- Michael Best, Associate Professor of Economics - Columbia University.
- Elena Patel, Co-Director - Urban-Brookings Tax Policy Center, Pozen Director's Chair, Senior Fellow - Economic Studies.
- Rodrigo Valdés, Director, Fiscal Affairs Department - International Monetary Fund.
- Welcome and introduction: David Wessel, Director - The Hutchins Center on Fiscal and Monetary Policy, Senior Fellow - Economic Studies.
- Moderator: Victoria Perry, Professor from Practice - Georgetown University Law Center.
- Closing remarks noted as part of the event program.
Content in this bundle
- Online Annexes
- Read the Chapter
- Executive Summary
- Foreword. IMF Fiscal Monitor, October 2026. Taxing to Better Boost Growth
- Executive Summary