The Coalition on Tax Expenditure Reform (COATE), co-founded by the International Centre for Tax and Development (ICTD), has launched a public consultation on draft voluntary minimum standards for tax expenditure reporting. COATE is inviting feedback from governments, international organisations, researchers, civil society organisations, and other stakeholders. Their input received will help shape the final set of principles and indicators, which will be published later this year.
Why tax expenditures? A USD 4 trillion blind spot in public finance
Tax expenditures are costly. Governments worldwide forgo close to a quarter of their tax revenues through tax expenditures, which include exemptions, deductions, credits, and reduced rates. In some countries, the costs of tax expenditures far exceed spending on health or education.
While these measures are designed to support investment, economic transformation, and social policies, they are often insufficiently scrutinised. The lack of reliable information on costs, beneficiaries, and impacts makes it difficult for governments to assess whether specific measures are actually achieving their intended objectives and should be maintained, whether they may need to be reformed, or whether they are wholly ineffective or detrimental and should be completely removed.
As governments around the world face tight fiscal space, rising debt, and growing demands for investment in development and climate priorities, tax expenditure reform is an important opportunity to strengthen domestic resource mobilisation.
“Tax expenditures can play an important role in supporting investment and broader policy objectives, but governments need reliable information to understand their costs and impacts,” said Giovanni Occhiali, Senior Research Fellow at ICTD and member of the COATE steering group.
“These draft standards aim to provide a practical and achievable baseline for improving transparency, while recognising the very different capacities and starting points across countries. We look forward to hearing from governments and other stakeholders as we refine the framework through this consultation process,” he added.
Consultation on voluntary minimum standards – open till 30 September
The consultation draft Voluntary Minimum Standards for Tax Expenditure Reporting: What Are They and Why Are They Important proposes voluntary standards to publish regular, comprehensive, and accessible information on tax expenditures and to ensure that these reports are integrated into national budgets.
The standards draw on the Global Tax Expenditures Transparency Index, and on years of experience by COATE partners working on tax expenditure reporting across countries. They seek to set a practical baseline that governments at any level of capacity can adopt.
Stakeholders are invited to comment on the draft standards, including whether the proposed four principles and 12 indicators are appropriately structured, ambitious, practical to implement, and likely to support greater transparency and accountability in tax expenditure reporting (view this page for some framing questions that might be useful).
The consultation is open until 30 September 2026 and comments should be submitted to [email protected].
About COATE
COATE is a global initiative led by the Council on Economic Policies, German Institute of Development and Sustainability (IDOS), ICTD, International Institute for Sustainable Development, and ODI Global. The coalition was launched as part of the Sevilla Platform for Action following the Fourth International Conference on Financing for Development and is endorsed by several governments and organisations.
