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Reforming Tax Expenditures in Italy: What, Why, and How?

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  • Justin Tyson

Abstract

The IMF has advised country authorities to roll back tax expenditures as a way to support fiscal consolidation efforts—urging them to evaluate tax expenditures according to clear criteria, and assessing their impact on public finances, economic efficiency, equity, and administrative and compliance costs. This paper analyzes tax expenditures in Italy, considering the extent to which tax expenditures can be considered part of an optimal tax system and possible reforms.

Suggested Citation

  • Justin Tyson, 2014. "Reforming Tax Expenditures in Italy: What, Why, and How?," IMF Working Papers 2014/007, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2014/007
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    1. Alm, James, 1996. "What Is an "Optimal'"Tax System?," National Tax Journal, National Tax Association, vol. 49(1), pages 117-33, March.
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    1. Cinzia Di Novi & Anna Marenzi & Dino Rizzi, 2018. "Do healthcare tax credits help poor-health individuals on low incomes?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(2), pages 293-307, March.
    2. Andrea Albarea & Michele Bernasconi & Cinzia Di Novi & Anna Marenzi & Dino Rizzi & Francesca Zantomio, 2015. "Accounting for Tax Evasion Profiles and Tax Expenditures in Microsimulation Modelling. The BETAMOD Model for Personal Income Taxes in Italy," International Journal of Microsimulation, International Microsimulation Association, vol. 8(3), pages 99-136.
    3. Julio López‐Laborda & Carmen Marín‐González & Jorge Onrubia, 2022. "The removal of tax expenditures from Spanish personal income tax: Impact on tax collection and income distribution," Public Budgeting & Finance, Wiley Blackwell, vol. 42(2), pages 221-254, June.
    4. Stjepan Gadzo & Irena Klemencic, 2014. "Time to stop avoiding the tax avoidance issue in Croatia? A proposal based on recent developments in the European Union," Financial Theory and Practice, Institute of Public Finance, vol. 38(3), pages 277-302.
    5. Ilzetzki, Ethan, 2018. "Tax reform and the political economy of the tax base," Journal of Public Economics, Elsevier, vol. 164(C), pages 197-210.
    6. Mukherjee, Sacchidananda, 2022. "Trends and Patterns of Tax Expenditures on Union Taxes in India," Working Papers 22/380, National Institute of Public Finance and Policy.
    7. Paolo Caro, 2020. "Decomposing Personal Income Tax Redistribution with Application to Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 113-129, March.
    8. Momi Dahan, 2023. "Social Construction And The Progressivity Of Local Tax Relief," Israel Economic Review, Bank of Israel, vol. 21(1), pages 1-33, March.
    9. Michal Andrle & Shafik Hebous & Alvar Kangur & Mehdi Raissi, 2021. "Italy: toward a growth-friendly fiscal reform," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 385-420, April.
    10. Pawel Galinski, 2014. "Significance of Tax Expenditures for Budgets of Local Governments: the Case of Poland," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 56-70, October.
    11. Elenka Brenna, 2018. "Rich and Well Educated: Are These Requirements Necessary to Claim Healthcare Tax Credits in Italy?," Applied Health Economics and Health Policy, Springer, vol. 16(2), pages 207-217, April.
    12. Emile Cammeraat & Ernesto Crivelli, 2020. "Toward a Comprehensive Tax Reform for Italy," IMF Working Papers 2020/037, International Monetary Fund.
    13. Binh Tran-Nam & Chris Evans & Richard Krever & Philip Lignier, 2016. "Managing Tax Complexity: The State of Play after Henry," Economic Papers, The Economic Society of Australia, vol. 35(4), pages 347-358, December.
    14. Martino Tasso, 2020. "Do details matter? An analysis of Italian personal income tax," Temi di discussione (Economic working papers) 1301, Bank of Italy, Economic Research and International Relations Area.
    15. Yuliya Tyurina & Svetlana Frumina & Svetlana Demidova & Aidyn Kairbekuly & Maria Kakaulina, 2023. "Estimation of Tax Expenditures Stimulating the Energy Sector Development and the Use of Alternative Energy Sources in OECD Countries," Energies, MDPI, vol. 16(6), pages 1-17, March.
    16. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.
    17. Ilanit Gavious & Tehila Kalagy & Shenhav Malul & Rami Yosef, 2022. "A Reform in Tax Benefits for the Israeli Pension Market," Israel Economic Review, Bank of Israel, vol. 20(1), pages 51-93.
    18. Paolo Di Caro, 2017. "Analisi distributiva dell?IRPEF utilizzando i microdati di fonte fiscale," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(1), pages 35-59.

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