Many articles in this Newsletter which can be downloaded from it.
INTERNATIONAL MONETARY FUND - Fiscal Affairs Department Newsletter
Tax Policy
May 2017
Fiscal Politics
"Curbing Corporate Debt Bias" Ruud de Mooij, Shafik Hebous; WP/17/22.
"Emerging Tax Issues in Asia" Opening Remarks by Vitor Gaspar at The Eighth IMF-Japan High-Level Tax Conference, March 2017.
"Taxing Oil, Gas and Minerals Across Borders Poses Challenges for Developing Nations" Philip Daniel, Michael Keen, Artur Swistak, Victor Thuronyi; IMFBlog; February 2017.
"Tax Treaties: Boost or Bane for Development?" Jim Brumby, Michael Keen; IMFBlog; November 2016.
"Fixing the Great Distortion: How to Undo the Tax Bias Toward Debt Finance" Ruud de Mooij, Michael Keen, Alexander Tieman; IMFBlog; November 2016.
"Can Property Taxes Reduce House Price Volatility? Evidence from U.S. Regions" Tigran Poghosyan; WP/16/216.
"Tax Certainty" IMF/OECD Report for the G20 Finance Ministers; March 2017.
"Financial Sector Debt Bias" Alexander F. Tieman, Oana Luca; WP/16/217.
Revenue Administration
"The Revenue Administration–Gap Analysis Program: An Analytical Framework for Excise Duty Gap Estimation" Mick Thackray; Technical Notes and Manuals; April 2017.
"The Revenue Administration–Gap Analysis Program: Model and Methodology for Value-Added Tax Gap Estimation" Eric Hutton; Technical Notes and Manuals; April 2017.
"Use of Technology in Tax Administrations 1 : Developing an Information Technology Strategic Plan (ITSP)" Gregory Dark, Margaret Cotton; Technical Notes and Manuals; March 2017.
"Use of Technology in Tax Administrations 2 : Core Information Technology Systems in Tax Administrations" Gregory Dark, Margaret Cotton; Technical Notes and Manuals; March 2017.
"Use of Technology in Tax Administrations 3: Implementing a Commercial-Off-The-Shelf (COTS) Tax System" Gregory Dark, Margaret Cotton; Technical Notes and Manuals; March 2017.
"Tax Administration Reforms in the Caribbean: Challenges, Achievements, and Next Steps" Stephane Schlotterbeck; WP/17/88.
"Tax Administration and Firm Performance: New Data and Evidence for Emerging Market and Developing Economies" Duncan Cleary et al.; WP/17/95.
"How Buoyant is the Tax System? New Evidence from a Large Heterogeneous Panel" Paolo Dudine, Joao Tovar Jalles; WP/17/4.
"Optimal Tax Administration" Michael Keen, Joel Slemrod; WP/17/8.
"Big Data Analytics for Better Revenue Administration" Duncan Cleary; PFM Blog; February 2017.
"Does Conditionality Mitigate the Potential Negative Effect of Aid on Revenues?" Ernesto Crivelli, Sanjeev Gupta; The Journal of Development Studies; March 2017.
"Fiscal Policy: How to Design and Enforce Tobacco Excises" Patrick Petit, Janos Nagy; How-to Notes 16/03.
"Revenue Diversification in the Arab World: Challenges and Opportunities" Vitor Gaspar's participation in panel discussions at Arab Fiscal Forum; February 2017.
Public Financial Management
"The Macroeconomic Benefits of Strong PFM Practices" Opening remarks by Vitor Gaspar; International Consortium on Governmental Financial Management (ICGFM); December 2016.
"Guatemala: Fiscal Transparency Evaluation" Mario Pessoa et al.; Country Report 16/372.
"How to Check Integrity of Fiscal Data" Pokar Kemani, Benoit Wiest; How-to Notes 16/04.
"How to Improve the Financial Oversight of Public Corporations" Richard Allen, Miguel Alves; How-to Notes 16/05.
"Liberia: Public Investment Management Assessment" Lesley Fisher et al.; Country Report 16/352.
"Governments and Promised Fiscal Consolidations: Do They Mean What They Say?" Sanjeev Gupta et al.; WP/17/39.
News
IMF debt chief backs Hammond’s flexible borrowing targets -Telegraph
Stop meddling with the tax system, IMF warns governments -Telegraph
The US could see a 'significant' rise in public debt-to-GDP ratio: Vitor Gaspar -CNBC
Interview: Fiscal policy to play bigger role for more inclusive growth in China - Xinhua
India has recorded impressive growth in recent years: IMF -MoneyControl
MoF holds workshop on IMF Fiscal Monitor -Albawaba Business
Trump’s tax-cutting drive likely to boost US debt, IMF warns -Public Finance International
IMF endorses Nigeria’s Economic Recovery Plan -Africa Independent Television
Leveraging tax policies can boost productivity, says IMF fiscal head -Public Finance International
Press Briefing: Fiscal Monitor
IMF Fiscal Monitor video
Useful Links
IMF Fiscal Monitor
Contacts in FAD
PFM Blog
Fiscal Issues at the IMF
FAD Brochure
Tax Policy and Administration Topical Trust Fund (TPA TTF)
Further Information
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Launch of FAD’s Fiscal Politics Book
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A new book, "Fiscal Politics", finds that politics and economics are closely linked, but smart rules and strong institutions can change the effects they have on one another. On March 29, the Brookings Global Economy and Development Program, led by Director Kemal Dervis, invited Vitor Gaspar and Sanjeev Gupta (editors, with Carlos Mulas-Granados), to present key findings, and to participate in a panel discussion.
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Fiscal Forum: Digital Revolutions in Public Finance
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The IMF’s eighth Fiscal Forum—this year hosted with the Bill & Melinda Gates Foundation—brought together policymakers from over 60 countries, the private sector, academia, and civil society to discuss “Digital Revolutions in Public Finance”. Policymakers face a difficult balancing act between the potential of digitalization to revolutionize fiscal policy formulation and implementation on the one hand, and societies’ privacy concerns and public sector capacity constraints on the other. The final roundtable discussion included David Lipton (First Deputy Managing Director, IMF), Martin Sandbu (Financial Times), Caroline Atkinson (Head of Global Policy, Google), Andrew McAfee (Co-Director, MIT Initiative on the Digital Economy) and Arvind Subramanian (Chief Economic Advisor to the Government of India).
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Labor and Product Market Reforms in Advanced Economies: Fiscal Costs, Gains, and Support
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Why are governments not making enough progress in implementing the reforms that they recognize as essential to boosting long-term potential growth in the current low-growth and high-debt environment? Are these reforms too costly and/or the benefits they produce not immediate enough? A recent interdepartmental study addresses this issue by examining the possible fiscal impact of labor and product market reforms in advanced economies. It also assesses the case for complementing such reforms with fiscal support, to alleviate their potential short-term economic costs and increase support for implementation.
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Second Arab Fiscal Forum Held in Dubai
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On February 12, the Arab Fiscal Forum was held in Dubai. The event, jointly organized by the Arab Monetary Fund and the International Monetary Fund, was attended by Christine Lagarde (Managing Director, IMF), with senior officials and experts from regional and international financial organizations, finance ministries and central banks. This year, the forum sessions focused on “Revenue Diversification in the Arab World,” covering opportunities and challenges especially in tax policy and revenue administration.
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Fiscal Monitor: Achieving More with Less
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Fiscal policy is being reassessed, to take on a greater role in fostering sustainable and inclusive growth and smoothing the economic cycle. Furthermore, the highly uncertain outlook and high public debt require a better understanding and management of fiscal risks. Therefore, fiscal policy has the difficult task of achieving more and better in a more constrained environment. The latest Fiscal Monitor shows how the evolution of the debate on fiscal policy can shed new light on fiscal developments and help frame policy recommendations to countries. Chapter 2, which discusses how fiscal policy can encourage productivity by upgrading the tax system, was presented on April 13 at the Peterson Institute for International Economics.
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Boosting Revenues, Driving Development: Why Taxes Are Critical for Growth
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On Friday, April 21, Michael Keen, Deputy Director of the Fiscal Affairs Department, participated in the panel discussion "Boosting Revenues, Driving Development: Why Taxes Are Critical for Growth" organized by the World Bank. Panelists focused on the importance of improving domestic revenue mobilization, which lies at the heart of the Sustainable Development agenda. The event was designed to start a conversation around the premise that: first, countries need a certain level of tax revenue to provide basic services to their citizens; and second, international community has a role in helping developing countries to achieve that goal. Partcipants agreed that governments’ ability to raise revenue and deliver public services relies on having a tax system designed with fairness and administered with efficiency.
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IMF/WB Conference: "International Tax Competition: Challenges for Developing Economies”
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FAD hosted the 3rd annual IMF/WBG conference on international taxation and developing countries on Monday, April 24. This year’s topic was the challenges facing developing economies from international tax competition. With over 100 participants, the forum debated the nature of spillovers to developing economies from the tax policies of advanced economies, and took a broader look at how some groups of countries coordinate taxes regionally in efforts to minimize the “race to the bottom” for foreign investment. Questions ranged from the pros and cons of a destination-based cash-flow tax to the appropriate depth and coverage of regional tax coordination. The next event on developing economies and international taxation will be hosted by the World Bank this October during the Annual Meetings.
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African Fiscal Forum in Cameroon
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The fifth African Fiscal Forum was held in Yaounde, Cameroon, on February 7-8. The event, jointly organized by the Cameroonian Ministry of Finance and the International Monetary Fund, was attended by senior officials of 33 countries in sub-Saharan Africa. The Cameroonian Minister of Finance, Mr. Alamine Ousmane Mey, gave the opening and closing remarks. The Forum, which provided a peer-learning opportunity to discuss the fiscal challenges facing the region, was organized around three themes: “Update on Global and Regional Developments and Implications for Fiscal Policies”, “Domestic Revenue Mobilization” and “Spending More Efficiently and Creating Fiscal Spaces”.
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CIAT: Advances of the Tax Administrations Towards Greater Taxpayer Equity by Improving Effectiveness and Efficiency
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The 51st CIAT (Inter-American Center of Tax Administrations) General Assembly titled “Advances of the tax Administrations towards Greater Taxpayer Equity by Improving Equity and Efficiency" took place in Asunción, Paraguay on April 24 through 27. The event gatheredinternational organizations and member countries as well as non-member countries specially invited to exchange experiences and to discuss and analyze topics related to the problems and tendencies that pertain to tax administration. Michael Keen, Deputy Director of the IMF's Fiscal Affairs Department, made a keynote address at the session on the "Progress of the Tax Administrations toward Greater Tax Equity". Mr. Keen's presentation focused on central aspects of taxation, inequality and fairness.
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Transparency and Beyond: Harnessing the Power of Accrual in Managing Public Finances
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Why are comprehensive and high-quality fiscal reports critical to public financial management? How can balance sheets be used to manage fiscal risks? How do politicians, capital markets and civil society see the importance of fiscal transparency? On March 6, the IMF organized, with the World Bank and the International Public Sector Accounting Standards Board, a seminar on Transparency and Beyond: Harnessing the Power of Accrual in Managing Public Finances. The one-day seminar, opened by FAD’s Deputy Director, Chris Towe, brought together key stakeholders in public financial management and accounting to debate perspectives, opportunities, and challenges in adopting accrual-based fiscal reporting. Participants emphasized the need to increase both accessibility and use of high-quality fiscal reports to improve transparency and support decision-making.
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Latin American Treasurers Discuss Cash Management Reforms
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Active cash investment and electronic payment systems were the main topics of the meeting of Latin American treasurers (FOTEGAL) hosted by FAD in Washington, on February 16-17, 2017. Chris Towe (FAD) emphasized that investing excess cash balances can generate positive financial returns to treasuries, but the challenge is to avoid excessive risks, including the possibility that cash-on-hand is insufficient to ensure timely payment of government obligations. Participants shared international experiences. On active cash management, the most important pre-condition for effective investment of temporary surplus cash is accurate cash-flow forecasting of all government flows. On the use of electronic payment systems, developments have been impressive. As forms of electronic payments are increasing substantially, the most important thing is to define a clear strategy and identify the solutions that are most useful, less costly, and user-friendly.
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African Finance Ministers Peer-Learning on Development Finance
A Peer-Learning seminar for sub-Saharan African Finance Ministers was hosted by FAD jointly with the Center for Global Development (CGD) and the African Center for Economic Transformation (ACET), at CGD headquarters in Washington, DC on April 24. The seminar covered two related topical issues regarding development finance and Sustainable Development Goals (SDGs): how the evolving landscape for development finance impacts medium- and long-term fiscal policy in sub-Saharan Africa, and how Finance Ministers can tackle the political economy issues around rationalizing tax expenditures and taxing immovable property. FAD Deputy Director Sanjeev Gupta gave opening remarks, and Mario Mansour, Deputy Division Chief, Tax Policy, provided the key presentation for the discussion on revenue mobilization.
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FAD is Helping CEMAC Modernize its Customs Union Legislation
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With current fiscal and security challenges in the Central Africa region, reforms are needed to strengthen revenue collection and control exemptions, and to enhance customs enforcement powers. A revised Customs Code is a key prerequisite for customs modernization in Central Africa. FAD and the IMF’s Legal Department met with the CEMAC Commission and Member States' customs representatives on March 13-17 in Libreville to help finalize extensive amendments to the 2001 regional Customs Code, which had been prepared by the Commission with FAD support in 2016. The team helped ensure that the proposed amendments are in line with WTO Trade Facilitation Agreement requirements (e.g. electronic procedures, risk-based control) and promote regional integration (e.g., easier circulation of goods between member states). Technical assistance to help implement the changes will now follow.
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International Forum on Mobilization and Effective Utilization of Domestic Resources
Sanjeev Gupta participated in a "Forum International sur la mobilisation et l’utilisation efficace des ressources intérieures", which discussed opportunities and challenges for revenue mobilization, in Conakry, Guinea, on November 10-12. The Forum was opened by President Prof. Alpha Condé and hosted by Minister of Budget Mohhamed Lamine Doumbouya. It attracted ministers from Guinea and other African countries (including the Prime Minister of Senegal), as well as experts and decision makers from many African countries. The meeting shared experiences on domestic revenue mobilization and the use of these resources to promote inclusive growth, with a focus on supporting reforms of institutions, policies, and processes.
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Coming soon! Expanded World Revenue Longitudinal Dataset (WoRLD)
FAD is currently updating the World Revenue Longitudinal Dataset (WoRLD), that provides data on tax and non-tax revenues. The expanded database will include broader country coverage, expanded range of variables and time periods. As with the current version that can be found here the dataset will contain consistently compiled data from a variety of sources, such as the World Economic Outlook (WEO) and Government Finance Statistics (GFS) enriched with details from IMF staff reports as well as external sources. The database and corresponding working paper will be available for download online.
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"Fiscal Politics in the Euro Area" Luc Eyraud, Tigran Poghosyan, Vitor Gaspar; WP/17/18.
Fiscal Politics: The IMF explores another side of public finance
"Fiscal Discipline and Exchange Rates: Does Politics Matter?" Carlos Mulas-Granados, João Tovar Jalles, José Tavares; WP/16/230.
"Political Institutions, State Building, and Tax Capacity: Crossing the Tipping Point" Vitor Gaspar, Laura Jaramillo, Philippe Wingender; WP/16/233.
"Fiscal Rules to Tame the Political Budget Cycle : Evidence from Italian Municipalities" Andrea Bonfatti, Lorenzo Forni; WP/17/6.
Macrofiscal
"Excessive Private Sector Leverage and Its Drivers: Evidence from Advanced Economies" Mariusz Jarmuzek, Rossen Rozenov; WP/17/72.
"Private and Public Debt: Are Emerging Markets at Risk?" Lorenzo Forni, Marco Bernardini; WP/17/61.
"Fiscal Crises" Kerstin Gerling et al.; WP/17/86.
"Paraguay: Technical Assistance Report-Establishing a Structural Balance Rule and a Public Debt Objective" Luc Eyraud, Antonio C. David, Felipe Bardella; Country Report 17/67.
"Fiscal Decentralization and Fiscal Policy Performance" Ivohasina F Razafimahefa, Moussé Sow; WP/17/64.
"Macroeconomic management when policy space is constrained" Presentation by Vitor Gaspar at Gaidar Forum "Russia and the World"; January 2017.
"Islamic banking: Good for growth?" Roland Kpodar; Economic Modelling V.59, pp.387-401; December 2016.
"Designing fiscal framework for a prospective commodity-producer: Options for Lebanon" Diego Mesa Puyo, Mariusz Jarmuzek, Naila Nahkle; Review of Middle East Economics and Finance V.12, I.3; December 2016.
"Fiscal Rules and Fiscal Councils: New Data Just Out!" Victor Lledó; PFM Blog; Match 2017.
"Strengthening the resilience of the global economy and the role of the G20" CEPS and the German Ministry of Finance; November 2016.
"Five Keys to a Smart Fiscal Policy" Vitor Gaspar, Luc Eyraud; IMFBlog; April 2017.
"Designed for Growth: Taxation and Productivity" Vitor Gaspar, Laura Jaramillo; IMFBlog; April 2017.
"Taxation, investment and innovation: a triptych for balanced growth" Opening remarks by Vitor Gaspar; European Comission; November 2016.
"Fiscal Policy and the Economy" Presentation by Vitor Gaspar; Norwegian Ministry of Finance; December 2016.
"The Case for Fiscal Policy to Support Structural Reforms" Angana Banerji, Era Dabla-Norris, Romain Duval, Davide Furceri; IMFBlog; March 2017.
Open Forum: "A Culture of Growth: The Origins of the Modern Economy" Vitor Gaspar - discussion moderation of Professor's Joel Mokyr new book.
"Inflation and Public Debt Reversals in the G7 Countries" Bernardin Akitoby, Ariel Binder, Takuji Komatsuzaki; Journal of Banking and Financial Economics; January 2017.
"Harnessing Resource Wealth for Inclusive Growth in Fragile Western African State" Rene Tapsoba et al.; January 2017.
"Immanuel Kant and Endogenous Growth Theory" Gabriel Fagan, Vitor Gaspar, Peter McAdam; Scottish Journal of Political Economy V.63, I.5; November 2016.
"How do financial cycles affect public debt cycles?" Tigran Poghosyan; Empirical Economics; January 2017.
"A Tale of Two Sectors : Why is Misallocation Higher in Services than in Manufacturing?" Carlos Robalo Marques, Christine J. Richmond, Daniel A Dias; WP/16/220.
"Tax Capacity and Growth : Is there a Tipping Point?" Vitor Gaspar, Laura Jaramillo, Philippe Wingender; WP/16/234.
"On the Determinants of Fiscal Non-Compliance: An Empirical Analysis of Spain’s Regions" Victor Duarte Lledo; WP/17/5.
"Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy?" Sampawende Tapsoba, Neree Noumon, Robert York; Journal of International Development; February 2017.
Expenditure Policy
"Can a causal link be drawn? A commentary on “the impact of IMF conditionality on government health expenditure: A cross-national analysis of 16 West African nations" Sanjeev Gupta; Social Science & Medicine V.181, pp.199-201; May 2017.
"Long-Run Biological Interest Rate for Pay-As-You-Go Pensions in Advanced and Developing Countries" Masahiro Nozaki; WP/17/98.
"Collect More, Spend Better: Public Investment in Asian Frontier Markets" Jiri Jonas et al.; WP/17/10.
"Public Spending on Health Care under IMF-Supported Programs" Sanjeev Gupta, Baoping Shang; IMFBlog; March 2017.
"Accroître l’efficacité de la dépense publique en France" Maximilien Queyranne; Revue Française des Finances Publiques RFFP n° 136.
"How Large are Global Fossil Fuel Subsidies" David Coady, Ian Parry, Louis Sears, Baoping Shang; World Development V.91, pp.11–27; March 2017.
"Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database" Kangni R Kpodar, Chadi Abdallah; WP 16/254.
"Automatic Adjustment Mechanisms in Asian Pension Systems?" Csaba Feher, Elif Arbatli et al.; WP/16/242.
"Expenditure Assessment Tools" Mercedes Garcia-Escribano, Candice Y Liu; Technical Notes and Manuals; April 2017.
