Summary
The Treasury has begun investigatory work on tax expenditure (TE) reporting. If released, the TE data would provide information on the accumulated stock of policy motivated spending made through the tax system.
New Zealand's approach to fiscal reporting is well regarded internationally. However, provision of information on the stock of TEs has been cited as a potential improvement.
This paper proposes a New Zealand approach for TE reporting.
Two separate datasets or reports could be prepared:
- A fiscal dataset will report on the small number of tax provisions deemed to be the conceptual equivalent of government spending. This data will be published on an annual basis to support the regular suite of fiscal information.
- Depending on interest, a second structural tax policy report could be released at less frequent intervals. The structural tax policy report would report on TEs that are significant, cross cutting, and are of a more structural nature.
The Treasury would welcome discussion or suggestions on our approach, criteria, and the preliminary list of tax expenditures.
