Since the beginning of July 2020, the German Federal Ministry for Economic Cooperation and Development (BMZ) supports the creation of the first global database on tax expenditures. The project is implemented by the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) in partnership with the Swiss think tank Council on Economic Policies (CEP). The term “tax expenditures” refers to tax incentives, reliefs or exemptions granted by governments in order to, for instance, attract investments, facilitate access to basic goods and services or support specific economic activities. Those may be noble causes, but more often than not the real dimension of these mechanisms and their effective benefit for the general public remain completely unknown. Most governments do not report the totality of tax expenditures granted, or they do not report them at all. In those cases where data is made available it becomes obvious that this is not a minor issue. Governments may forego tax revenues of up to seven per cent of the “Gross Dometic Product (GDP)” – in some cases even more.
DIE project lead and senior researcher Christian von Haldenwang observes:
Christian von Haldenwang, ©DIE
“For the first time, the Global Tax Expenditure Database will enable researchers, government officials and civil society to get a clear picture on the extent to which states release information on tax expenditures. Data on individual countries can be contrasted with information from other sources, or compared to other countries in the region and worldwide. Our ambition is to improve the informational basis for research and public debate. In addition, we want to incite governments to produce regular, encompassing and public reports on tax expenditures.”
GTED will be made public on a website in early 2021, at the latest.