This toolkit attempts to address some of the challenges associated with difficulties in accessing comparables data. While 'perfect' or ideal comparables may only rarely be available, commonly the data that is available will still allow a reasonably reliable analysis to be performed and a satisfactory approximation of an arm's-length outcome to be determined. Part II of this toolkit thus focuses on making the best use of available data.
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.