{
  "title": "Managing Tax Incentives in Developing Countries",
  "publication": "Technical Notes and Manuals, November 21, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/tnm/issues/2024/11/21/managing-tax-incentives-in-developing-countries-554978",
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  "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.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- This Technical Guidance Note sets out the essential elements to effectively manage tax incentives in developing countries.\n- Emphasis on the important role that revenue authorities must play in preventing abuses and revenue leakages.\n- Presents considerations for a risk-based compliance program on tax incentives that combines various supportive, preventative, and corrective practices and approaches.\n- Delineates key enablers, such as a whole-of-government approach, robust transparency and accountability practices, and a modern compliance risk management framework."
    },
    {
      "heading": "Major findings and emphasis",
      "content": "- Revenue authorities play a central role in preventing abuses and revenue leakages associated with tax incentives.\n- Effective management of tax incentives requires combining supportive, preventative, and corrective practices within a risk-based compliance program.\n- Key enablers identified include:\n  - whole-of-government approach,\n  - robust transparency and accountability practices,\n  - modern compliance risk management framework."
    },
    {
      "heading": "Elements of a risk-based compliance program on tax incentives",
      "content": "- Combine supportive, preventative, and corrective practices and approaches.\n- Implement risk differentiation to focus resources on higher-risk taxpayers and incentive arrangements.\n- Strengthen due diligence and reporting obligations tied to incentive administration.\n- Integrate compliance activities across revenue administration functions and, where relevant, customs authorities."
    },
    {
      "heading": "Policy recommendations and approaches",
      "content": "- Adopt a whole-of-government approach to coordinate tax incentives policy and administration across relevant agencies.\n- Enhance transparency and accountability around the granting, use, and monitoring of tax incentives.\n- Modernize compliance risk management frameworks to better detect, prevent, and correct abuses and revenue leakages.\n- Ensure that semi-autonomous revenue bodies and special economic zones are incorporated into broader compliance strategies where applicable.\n\n---\n\n Content in this bundle\n\n- Managing Tax Incentives in Developing Countries; November 2024; TNM 2024/07\n  - Managing Tax Incentives in Developing Countries; November 2024; TNM 2024/07 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Managing Tax Incentives in Developing Countries; November 2024; TNM 2024/07 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/tnm/issues/2024/11/21/managing-tax-incentives-in-developing-countries-554978"
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    "Authors: Miguel Pecho, Stoyan E Markov, Philip R Wood, Rachel Auclair, Fernando Velayos",
    "Published: November 21, 2024",
    "Series: Technical Notes and Manuals",
    "DOI: https://doi.org/10.5089/9798400289590.005",
    "This Technical Guidance Note sets out the essential elements to effectively manage tax incentives in developing countries.",
    "Emphasis on the important role that revenue authorities must play in preventing abuses and revenue leakages.",
    "Presents considerations for a risk-based compliance program on tax incentives that combines various supportive, preventative, and corrective practices and approaches.",
    "Delineates key enablers, such as a whole-of-government approach, robust transparency and accountability practices, and a modern compliance risk management framework.",
    "Revenue authorities play a central role in preventing abuses and revenue leakages associated with tax incentives.",
    "Effective management of tax incentives requires combining supportive, preventative, and corrective practices within a risk-based compliance program.",
    "Key enablers identified include:",
    "Combine supportive, preventative, and corrective practices and approaches.",
    "Implement risk differentiation to focus resources on higher-risk taxpayers and incentive arrangements.",
    "Strengthen due diligence and reporting obligations tied to incentive administration.",
    "Integrate compliance activities across revenue administration functions and, where relevant, customs authorities.",
    "Adopt a whole-of-government approach to coordinate tax incentives policy and administration across relevant agencies.",
    "Enhance transparency and accountability around the granting, use, and monitoring of tax incentives.",
    "Modernize compliance risk management frameworks to better detect, prevent, and correct abuses and revenue leakages.",
    "Ensure that semi-autonomous revenue bodies and special economic zones are incorporated into broader compliance strategies where applicable.",
    "**Managing Tax Incentives in Developing Countries; November 2024; TNM 2024/07**"
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