Legal Issues, Governance, and the IMF

Technical Assistance on Drafting of Legislation on Fiscal Issues

Last Updated: October 15, 2007

The IMF Legal Department (LEG) has a well-developed program of assistance to IMF member countries in drafting new laws or amendments to existing laws in the area of fiscal law and policy. Technical assistance has been provided to over seventy countries in the drafting of some 200 laws and regulations dealing with tax (income tax, value added tax, and others), tax procedure, customs, the budgetary process, and public debt management. 1

This program is part of the general technical assistance activities of the IMF, and is coordinated with other interested IMF Departments, such as the Fiscal Affairs Department (FAD) and the relevant area department. In particular, LEG's drafting work often implements policy changes arising on the basis of FAD recommendations. Coordination with FAD may be carried out in the form of joint missions or consultations at IMF headquarters.

Who are we?

The Legal Department's technical assistance program is run by a small staff, headed by Barend Jansen, Assistant General Counsel with Victor Thuronyi, Senior Counsel (Taxation) in charge of fiscal legislation.2 The program involves a network of experts throughout the world who have carried out drafting assignments throughout the years, most of whom are academics. For each project, we try to match an expert with the appropriate skills, including language skills and legal background, with the needs of the country. We usually form a small team to follow through on the project.

How does collaboration with us work?

The procedure for requesting technical assistance is simple: the authorities can address a letter to the General Counsel (Mr. Sean Hagan) (it can be faxed to (202)623-6541 or emailed to The request should state that assistance is being sought and describe the proposed legislation. It should be made only after the government has decided to proceed with the legislation. The communication should normally be signed by the head policymaker in the fiscal area (normally the Minister of Finance) or someone with the authority to represent the Minister (such as a deputy minister). No particular form is required.

Our ability to accommodate requests is subject to resource constraints (principally budget and schedule limitations). Requests are prioritized in consultation with area departments. The likelihood of our being able to respond to a request is increased if we have sufficient notice (preferably, a few months).

Face-to-face meetings are needed to draft legislation jointly or to discuss draft legislation prepared by a country's officials. This is because the drafting process involves a dialogue to discover the intended policy and to explore different ways of implementing that policy. Depending on the preferences of the authorities, an initial draft might be prepared by LEG or by the authorities. It is then a matter of going through the draft and working out the best language. Sometimes the draft is based heavily on the existing law, or consists of specific amendments to this law, while in other cases the authorities choose to start virtually from scratch with a draft that departs from existing practice. LEG has substantial experience with either approach.

Is there any cost?

Generally, there is no charge for our technical assistance services.

General drafting philosophy

We strive for a simple and clear drafting style, while recognizing that fiscal policy and legislation are technical areas that may not be fully understandable to the average person in the street. In addition, we strive to be consistent with the drafting style of the jurisdiction in question. To the extent possible, we advocate legislation that is simple to administer, given that many developing and transition countries have limited administrative capacity, and in many cases a limited history of applying legislation dealing with fiscal issues.

Is this only for countries with a Fund-supported program? Does it imply IMF control over fiscal policy?

Because countries with a Fund-supported program are in an intensive dialogue with Fund staff on many aspects of economic policy, and because legislation on fiscal issues is often a part of the member's program, LEG has often worked with such countries on such legislation. However, much of our work has been with countries with no Fund-supported program. It should be emphasized that, in all cases, fiscal policy decisions are for the authorities of the country, not for the IMF; accordingly, LEG in its drafting work will always prepare a draft consistently with the policy decisions of the authorities. We would, of course, inform the authorities if the decisions they propose appear to be inconsistent with a member's program, or appear inconsistent with principles of good fiscal policy or administration. This is part of our role in providing the best possible advice we can to governments.

Contact for more information:

Victor Thuronyi
Senior Counsel (Taxation)
Room 4-100C
International Monetary Fund
Washington, D.C. 20431
Fax: 202-623-6541
Tel: 202-623-7706

1 Posted on the IMF website are generic samples of the IMF Legal Department's work (tax code, VAT laws, and income tax law).

2 Victor Thuronyi is author or editor of numerous publications on taxation, including Tax Law Design and Drafting, published by the IMF and Comparative Tax Law, published by Kluwer Law International.