Tools for the assessment of tax incentives for investment

This background paper describes five different tools that can be used for the assessment of tax incentives by governments in low income countries. The first tool (an application of cost-benefit analysis) provides an overarching framework for assessment. Evaluations of the various costs and benefits of tax incentives are vital for informed decision making, but are rarely undertaken, partly because it can be a difficult exercise that is demanding in terms of data needs.