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Global Tax Expenditures Transparency Index (GTETI) - Concept Note - Governments use tax expenditures (TEs) - also called tax breaks, tax reliefs or tax subsidies - to pursue a variety of policy goals. TEs are deviations from the benchmark or standard tax system that provide preferential tax treatment to individuals or businesses. They can trigger substan- tial tax revenue losses. According to the Global Tax Expenditures Database (GTED), the global average of revenue forgone due to TEs among the 106 countries that publish such data is 4.2 percent of GDP and 22.9 percent of tax revenue over the 1990-2021 period. In some countries, such as Czechia, Finland, Jordan, the Netherlands and Russia, revenue forgone from TEs can amount to more than 9 percent of GDP. Given the magnitude of TEs, the estimation and reporting of their fiscal cost should be a prior- ity for governments worldwide. Such estimates are a necessary input to evaluate the effective- ness and efficiency of TE provisions and, ultimately, to decide which provisions to keep, modify or remove. However, the quality of TE reporting is often poor and important data is frequently missing. Few studies compare TE reporting across countries. For instance, Kassim and Mansour (2018) evaluate The GTETI at a glance… the TE reports of 21 developing and transition econ-  100+ reporting countries omies, using a matrix of dimensions that character-  Five dimensions, 25 indicators ize good practices in TE reporting. Redonda and  Freely accessible online Neubig (2018) apply a similar approach to the 43  Regularly updated G20 and OECD economies. Based on GTED data,  Qualitative and quantitative von Haldenwang et al. (2021) assess the large varia- assessments tion in the quality of TE reporting worldwide.  Parallel research using pairs of external consultants The Global Tax Expenditures Transparency Index  Prior notification of jurisdic- (GTETI) is the first comparative assessment of TE re- tions and conflict resolution porting that covers countries worldwide. Building mechanism on the data collection and classifications developed to construct the GTED, the GTETI provides a sys- tematic framework to rank countries according to the quality of their reporting. Countries are not compared according to the amount of revenue forgone they report, but rather assessed on five dimensions: (1) public availability of TE reports, (2) an institutional framework that en- sures transparency and accountability, (3) general information on the scope of reporting and methodology used, (4) detailed information on individual TEs, and (5) information on revenue forgone and evaluations. The GTETI aims at increasing transparency and accountability in the TE field, promoting public debate and encouraging governments to improve their TE reporting as a first necessary (though certainly not sufficient) step towards comprehensive evidence-based TE reform. Saatja: Sofia Berg <[email protected]> Saadetud: 28.09.2023 10:18 Adressaat: <"RAM Info"> Koopia: Agustin Redonda <[email protected]>; Lucas Millan <[email protected]> Teema: Global Tax Expenditures Transparency Index (GTETI) Manused: image001.png; GTETI_Concept Note_Launch_Final.pdf; GTETI Questionnaire_EST_shared1.xlsx Dear Sir or Madam, My name is Sofia Berg and I work as a Research Analyst for the Council on Economic Policies (CEP). CEP, together with the German Institute of Development and Sustainability (IDOS) are launching the Global Tax Expenditures Transparency Index (GTETI). The GTETI aims to increase tax expenditure transparency and accountability by providing a systematic framework to rank countries according to the regularity, quality, and scope of their tax expenditure reports – FYI, you find the GTETI Concept Note attached. I am reaching out to you because the last stage of the GTETI assessment requires to share the GTETI Scoring Sheet with the governments of the assessed countries to give them the possibility to comment or let us know if they find something incorrect. You find attached the GTETI Scoring Sheet for Estonia. We would grateful if you could review it and let us know if there is something you would like to discuss or change by Friday October 6, latest. If you agree with the assessment and think that nothing needs to be changed, we would appreciate if you could confirm that through a brief response to this email. If you need support with the translation of the scoring sheet, please let us know. We would be happy to help. Alternatively, publicly available and free of charge translation tools such as Deepl and Google Translate be useful. The GTETI will be officially launched on October 9 (2.00-5.30 pm CEST) through a hybrid event, and the GTETI team would be delighted to have you joining us – please feel free to share the invite with your colleagues and networks if you think this could be of interest. You find more details about the event here, and the registration link to the event here. I remain at your disposal should you have questions or comments. Thank you very much for your time. Best regards, Sofia Berg Sofia Berg - Research Analyst Council on Economic Policies Seefeldstrasse 60, 8008 Zurich, Switzerland www.cepweb.org