Bonn: German Institute of Development and Sustainability (IDOS)
To manage the transformational changes humankind is currently facing, setting up the right fiscal policies is of pivotal importance. Given their magnitude and widespread use, tax expenditures (TEs) play a key role in this context. TEs can be powerful policy instruments to boost investment, employment and innovation. When ill-designed, however, they can also trigger unsustainable outcomes such as accelerating climate change and exacerbating inequality. This Flagship Report shows once again that assessing the effectiveness of TEs, incorporating TEs into broader fiscal policy frameworks, and promoting political debates on TE reform critically depend on the quality of TE reporting.