AN APPROACH FOR EX-POST CIT GAP ANALYSIS AND EX-ANTE CORPORATE TAX INCENTIVES EVALUATION

Glenn Jenkins (), Owotomiwa C. Olubamiro (), Mikhail Miklyaev () and Amin Sokhanvar ()
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Owotomiwa C. Olubamiro: Cambridge Resources International Inc.
Mikhail Miklyaev: Department of Economics Queen’s University, Canada, and Cambridge Resource International Inc.
Amin Sokhanvar: Cambridge Resources International Inc.

No 2025-03, Development Discussion Papers from JDI Executive Programs

Abstract: Tax incentives are widely used to attract investment and stimulate economic growth, but they also pose challenges related to revenue loss, tax compliance, and administrative efficiency. This report provides a structured framework for evaluating tax incentives in Madagascar, assessing their fiscal and economic impacts while ensuring alignment with the country’s development objectives. The report introduces methodologies for analyzing tax expenditures across different tax categories, including corporate income tax (CIT), value-added tax (VAT), excise taxes, and trade taxes. It emphasizes the importance of cost-benefit analysis (CBA) to determine whether tax incentives generate sufficient economic benefits to justify their fiscal costs. Additionally, the report discusses the role of stakeholder analysis in understanding how different tax measures affect businesses, government revenue, and public welfare. This report explores the risks associated with tax incentives, such as potential revenue leakages, compliance challenges, and the administrative burden on tax authorities. It highlights best practices for monitoring and evaluating tax policies to improve transparency and accountability. The findings of this study provide policymakers with essential guidelines for designing effective and sustainable tax incentives. By adopting a rigorous evaluation approach, Madagascar can enhance its tax policy framework, ensuring that incentives contribute to long-term economic growth without undermining public finances.

Keywords: Cost-Benefit Analysis (CBA); Corporate Income Tax (CIT); Fiscal Policy; Tax Incentives; Tax Expenditure Analysis (search for similar items in EconPapers)
JEL-codes: H2 H3 H4 H5 O2 O5 (search for similar items in EconPapers)
Pages: 30 Pages
Date: 2025-02-05
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:4628

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