United nations of tax incentives

Part II focuses on practical considerations regarding the use 
of tax incentives. It encompasses two Chapters. Chapter I provides 
a list of items to be considered and addressed when drafting a tax 
incentive scheme to ensure consistency between the legal framework 
of such scheme and the policy underlying it, as well as clarity with 
respect to the scope of application and easiness in its administration. 
Chapter II proposes a cost-benefit analysis as an approach to assess 
the effectiveness of tax incentives. It includes a conceptual framework 
for such analysis, a comparative study of two existing schemes used in 
the United States of America, and a prototype model of cost-benefit 
analysis for assessing tax incentives without involving sophisticated 
economic modelling tools.
Part III contains a detailed report on the cost-benefit analysis 
of tax incentives granted to the tourism industry in the Dominican 
Republic. It includes a review of the performance of the tourism 
industry in the Dominican Republic from a historical and regional 
perspective, as well as an assessment of the benefits and costs (including 
the opportunity cost) of such a program.
It is important to note that all the considerations and 
recommendations presented in this publication are based on several 
approaches that have proven to be good practices in various countries. 
However, tax administrators should be cautious in applying them to 
different contexts and should consider the legal framework and the 
degree of institutional development required to adapt such practices 
to the situation in any specific country.
The electronic version of this publication is available free 
of charge in English at http://www.un.org/esa/ffd/wp-content/
uploads/2018/02/tax-incentives_eng.pdf, and Spanish at http://www.
un.org/esa/ffd/wp-content/uploads/2018/02/tax-incentives_sp.pdf.

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