Reforming Tax Expenditures in Italy: What, Why, and How?

January 16, 2014

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The IMF has advised country authorities to roll back tax expenditures as a way to support fiscal consolidation efforts—urging them to evaluate tax expenditures according to clear criteria, and assessing their impact on public finances, economic efficiency, equity, and administrative and compliance costs. This paper analyzes tax expenditures in Italy, considering the extent to which tax expenditures can be considered part of an optimal tax system and possible reforms.

Subject: Corporate income tax, Personal income tax, Public financial management (PFM), Tax allowances, Tax expenditures, Taxes, Value-added tax

Keywords: budget process, Corporate income tax, differential VAT regime, draft tax reform law, efficiency, equity, expenditure, expenditure program, government, labor tax wedge, optimal taxation, Personal income tax, single tax, substitute tax regime, tax, Tax allowances, tax design, tax expenditure, tax expenditure cost, Tax expenditures, tax norm, Value-added tax, WP

Pages:
16
Volume:
2014
DOI:
https://doi.org/10.5089/9781484370773.001
Issue:
007
Series:
Working Paper No. 2014/007
Stock No:
WPIEA2014007
ISBN:
9781484370773
ISSN:
1018-5941

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