SEVILLE, SPAIN – 1st July 2025 – Five leading global research and policy organizations launched a coalition to accelerate reforms of tax expenditures through evidence-based research and technical assistance on the opening day of the Fourth Financing for Development Conference (FfD4) taking place in Seville this week.
Governments worldwide forgo an estimated 4 per cent of global GDP — around a quarter of all tax revenues — each year through tax holidays, exemptions, and incentives. Most of these tax expenditures are untracked, unevaluated, and underreported, continuing without clear evidence of impact. This creates a major fiscal drain, leaving fewer resources for infrastructure, health, education, climate action, and other development priorities.
ICTD Executive Director, Giulia Mascagni said “With aid retreating and debt costs spiralling, governments in lower-countries should seriously consider rationalising tax incentives as a way to increase domestic revenue. These incentives result in large costs in terms of revenue foregone, while their benefits are unclear. Dropping those whose costs outweigh benefits would simultaneously increase revenue and improve equity.”
With the Compromiso de Sevilla calling for ‘enhanced oversight and management of tax expenditures’, the FfD4 outcome provides a clear mandate and momentum for this initiative, ensuring the agreement leads to concrete actions like standardised reporting to improve transparency and oversight, and the rationalisation of ineffective tax expenditures.
The new initiative will scale up research and independent technical support to governments, exchange expertise and best practices, leverage complementary strengths from different members to provide holistic support, and work on strengthening international momentum, ensuring tax expenditure reforms remain a priority in forums like FfD4.
As of now, the United Kingdom, Brazil, France, Guinea, Nigeria, Rwanda, Senegal, and Spain have already endorsed the initiative, signaling growing political will to bring transparency and accountability to this area of public finance.
“Despite their fiscal cost, tax expenditures are often poorly understood, weakly scrutinised, and inadequately reported. This coalition aims to close that gap with rigorous research, hands-on technical support to governments, and international cooperation.” Elisângela Rita, Tax Policy Advisor at the International Institute for Sustainable Development, one of the lead implementing entities.
Watch the launch event below:
For more information or to request an interview, please contact the following:
ICTD: Emilie Wilson
Head of Communications and Impact (ICTD)
[email protected]
IISD: Lauren George
Communications Officer, IISD
[email protected]
ODI Global: Anna Schuesterl
[email protected]
About the Coalition: The five partner organisations are the Council on Economic Policies, the International Centre for Tax and Development, the German Institute for Development and Sustainability, the International Institute for Sustainable Development, and ODI Global. Together, they bring decades of experience supporting governments, civil society, and international institutions in advancing fiscal reform. Their combined strengths in research, policy design, and on-the-ground implementation position the platform to support meaningful, sustained reform across diverse contexts.
About ICTD: The International Centre for Tax and Development (ICTD) is an independent research centre focused on improving tax policy and administration in lower-income countries. ICTD is based at the Institute of Development Studies (IDS) which delivers world-class research, learning and teaching that transforms the knowledge, action and leadership needed for more equitable and sustainable development globally.
About FfD4: The Fourth International Conference on Financing for Development (FfD4), which hopes to set out a renewed global financing framework for sustainable development. The previous (3rd) Financing for Development Conference took place in 2015, in Addis Ababa. Its commitments, including supporting the strengthening of “international cooperation to support efforts to build capacity in developing countries, including through enhanced official development assistance (ODA)”, are set out in the Addis Ababa Action Agenda.
