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

The International Institute for Sustainable Development (IISD) argues that a recent draft of the Outcome Document for the Fourth Conference on Financing for Development (FfD4) weakens commitments to the oversight and reporting of tax expenditures. The statement calls for the reinstatement of stronger language to ensure countries can rationalize ineffective tax expenditures and increase domestic resource mobilization to fund sustainable development, climate, and biodiversity goals.

• Tax expenditures, which are benefits that reduce the tax paid by eligible taxpayers and the revenue collected by governments, account for approximately 4% of global GDP and 25% of global tax revenue, a level that has remained relatively stable since 1990 according to the Global Tax Expenditures Database (GTED).
• The IISD criticizes a shift in the draft Outcome Document for the Fourth Conference on Financing for Development (FfD4), where a previous commitment to "increase transparency and improve oversight and management of tax expenditures, and implement minimum standards for tax expenditure reporting" was replaced by a passive suggestion to "encourage the enhancement of oversight."
• The Global Tax Expenditure Transparency Index (GTETI) identifies three minimum standards for tax expenditure reporting: regularity (reports issued at regular intervals, ideally linked to the annual budget cycle), transparency (publishing information on all tax expenditures, including those without revenue estimates), and specificity (providing information and revenue forgone estimations for each individual provision).
• To support governments in reforming tax expenditures, a proposed Coalition on Tax Expenditures—comprising academic institutions, non-governmental institutions, and think tanks—would focus on scaling up research, exchanging best practices via a global knowledge-sharing platform, providing holistic support through complementary organizational strengths, and maintaining international momentum in forums like FfD4.

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} }