Gaining insight into tax incentive costs, benefits, and effectiveness was the top priority among delegates attending the regional seminar on Improving the Use of Incentives in the Southern Mediterranean (MED) Region. The seminar was part of the EU-OECD Programme on Promoting Investment in the Mediterranean. Leaders from government agencies and investment promotion agencies in Algeria, Egypt, Jordan, Lebanon, Libya, Morocco, the Palestinian Authority, and Tunisia participated in the two-day event.
Ellen Harpel, representing Smart Incentives and as an affiliate of the Stephen S. Fuller Institute at the Schar School of Policy and Government of George Mason University, was invited to present on the Smart Incentives 4×4 framework, steps for managing incentives for transparency and accountability, and reporting standards for incentive programs.
The seminar addressed:
- Tax policy and investment incentives in the southern Mediterranean
- Benefits and costs of tax incentives for investment
- Country experiences using tax incentives
- Governance and institutional coordination of investment incentives
- Incentives for extractive industries
- Reporting on and monitoring of tax incentives
The leading topics of concern will sound familiar.
- Calculating the socioeconomic costs and benefits associated with incentives alongside the fiscal costs
- Identifying ways to cooperate across jurisdictions, not just compete
- Determining which incentives are most effective
- Increasing transparency into the revenues foregone through tax incentives
- Improving coordination among government agencies
- Collecting appropriate data from incentive recipients to allow monitoring and evaluation
- Implementing information technology (or digitalization) solutions to facilitate data collection, management and reporting
- Standardizing methodologies and sharing best practices
- Updating incentive rules to align with current economic conditions
Many thanks to the OECD for the invitation to attend. The program was an excellent opportunity to learn about the good work currently being done in the region. As competition expands for a diminishing level of global FDI, efforts to sharpen the focus on the most effective incentives will likely remain an international priority.