FfD4 Countdown: A Watered-Down Proposal on Tax Expenditures Risks Undermining Countries’ Domestic Revenue Mobilization

The International Institute for Sustainable Development warns that a weakened proposal in the FfD4 Outcome Document regarding the oversight of tax expenditures risks undermining domestic resource mobilization. The author advocates for the reinstatement of commitments to minimum reporting standards—defined by regularity, transparency, and specificity—to help governments identify and reform ineffective or harmful tax incentives. To support this, the document proposes the creation of a Coalition on Tax Expenditures comprising think tanks and academic institutions to provide technical support and research to low- and middle-income countries.

• Global revenue lost to tax expenditures is estimated at approximately 4% of GDP and 25% of tax revenue, a level that has remained stable since 1990.
• The draft Outcome Document for the Fourth Conference on Financing for Development (FfD4) has been weakened, moving from a commitment to implement minimum reporting standards to a passive suggestion to "encourage the enhancement" of oversight.
• Effective tax expenditure reporting should adhere to three minimum standards derived from the Global Tax Expenditure Transparency Index (GTETI): regularity (reports linked to the budget cycle), transparency (publication of all expenditures), and specificity (detailed information and revenue estimates for each individual provision).
• The author proposes establishing a Coalition on Tax Expenditures, consisting of academic institutions, non-governmental organizations, and think tanks, to provide governments with technical support, research, and a global knowledge-sharing platform for reforming tax incentives.

APA

Redonda,, A. R. G. V. H. O. ,. (2025). FfD4 Countdown: A Watered-Down Proposal on Tax Expenditures Risks Undermining Countries’ Domestic Revenue Mobilization. International Institute for Sustainable Development. https://www.iisd.org/articles/insight/ffd4-financing-development-conference-proposal-tax-expenditures-undermines-domestic-resource-mobilization

Chicago

Redonda,, Alexandra Readhead,Hazel Granger,Christian von Haldenwang,Giovanni Occhiali ,Agustín. FfD4 Countdown: A Watered-Down Proposal on Tax Expenditures Risks Undermining Countries’ Domestic Revenue Mobilization. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/insight/ffd4-financing-development-conference-proposal-tax-expenditures-undermines-domestic-resource-mobilization.

Wikipedia

{{cite press release |last1=Redonda, |first1=Alexandra Readhead,Hazel Granger,Christian von Haldenwang,Giovanni Occhiali ,Agustín |title=FfD4 Countdown: A Watered-Down Proposal on Tax Expenditures Risks Undermining Countries’ Domestic Revenue Mobilization |publisher=International Institute for Sustainable Development |date=15 April 2025 |url=https://www.iisd.org/articles/insight/ffd4-financing-development-conference-proposal-tax-expenditures-undermines-domestic-resource-mobilization |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{redonda2025ffd4, author = {Redonda,, Alexandra Readhead,Hazel Granger,Christian von Haldenwang,Giovanni Occhiali ,Agustín}, title = {{FfD4 Countdown: A Watered-Down Proposal on Tax Expenditures Risks Undermining Countries’ Domestic Revenue Mobilization}}, publisher = {International Institute for Sustainable Development}, year = {2025}, month = apr, url = {https://www.iisd.org/articles/insight/ffd4-financing-development-conference-proposal-tax-expenditures-undermines-domestic-resource-mobilization}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }