Annex 1
Good practice principles for the effective management
of tax reliefs
We believe a framework for a well-designed tax relief,
and system of reliefs, would include:
· A clear definition of tax expenditures,
so it is easy to understand the number and value of these types
of reliefs and they can be monitored appropriately;
· Assessing the effectiveness of tax
expenditures, using the same basic principles
as for spending programmes;
· Establishing the policy objectives
of a relief, so it is possible to evaluate the relief ;
· Understanding the costs and benefits,
including the costs of abuse;
· Measuring behavioural change
as a result of the relief's introduction, to assess whether it
has resulted in the intended behaviour change;
· Setting clear parameters for
monitoring the cost and impact of reliefs, such as establishing
what changes in costs will trigger feedback to policy makers;
· A responsible attitude to promoting
take-up, to ensure target groups can use
the relief.
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