United nations of tax incentives

tic
al
 m
ea
ni
ng
So
ur
ce a
nd u
se i
n o
ur m
et
ho
do
lo
gy
M
ult
ip
lie
r o
f t
ot
al
 
G
D
P i
m
pa
ct o
n d
ir
ec
t 
(to
ur
is
m
) G
D
P
To
ta
l G
D
P i
m
pa
ct i
nc
lu
de
s d
ire
ct
, i
nd
ire
ct a
nd
in
du
ce
d G
D
P i
mp
ac
ts
.
D
ire
ct a
nd i
nd
ire
ct G
D
P i
m
pa
ct
s a
re t
he c
on
-
ce
pt
s a
ss
oc
ia
te
d w
ith t
he I
-O a
cc
ou
nt
s. Th
e 
di
re
ct G
D
P i
m
pa
ct m
ea
ns t
he d
ire
ct v
al
ue
-
ad
de
d f
ro
m p
ro
du
ci
ng a u
ni
t o
f (
e.g
., t
ou
ri
sm
) 
ou
tp
ut
. Th
e i
nd
ire
ct G
D
P i
m
pa
ct i
s a
ss
oc
ia
te
d 
w
ith e
co
no
m
ic a
ct
iv
iti
es t
rig
ger
ed b
y t
he d
ire
ct
im
pa
ct
. F
or e
xa
m
pl
e, a u
ni
t o
f t
ou
ri
sm o
ut
pu
t 
re
qu
ire
s i
np
ut f
ro
m r
es
ta
ur
an
t a
nd h
ot
el s
ec
-
to
rs (
di
re
ct
), e
ac
h o
f w
hi
ch r
eq
ui
re
s i
np
ut f
ro
m
fo
od a
nd u
til
ity s
ec
to
rs (
in
di
re
ct
); b
ot
h d
ire
ct
an
d i
nd
ire
ct a
ct
iv
iti
es g
en
er
at
e G
D
P i
nc
lu
di
ng
ca
pi
ta
l a
nd l
ab
ou
r i
nc
om
es
.
In
du
ce
d i
m
pa
ct i
s t
he m
ul
tip
lier e
ffe
ct o
f 
th
e i
nc
om
e g
en
er
at
ed b
y e
co
no
m
ic a
ct
iv
iti
es
th
ro
ug
h b
ot
h d
ire
ct a
nd i
nd
ire
ct G
D
P i
m
pa
ct
s. 
W
ith
ou
t s
uffi
ci
en
t i
nf
or
m
at
io
n f
ro
m t
he e
xi
st-
ing D
R’
s 2
01
2 I
-O a
cc
ou
nt
s, t
he m
ul
tip
lier o
f 
to
ta
l G
D
P i
m
pa
ct o
n d
ire
ct G
D
P i
m
pa
ct i
s 
der
iv
ed f
ro
m t
he W
TT
C d
at
as
et f
or D
R. Th
is 
m
ul
tip
lier i
s u
se
d t
o e
st
im
at
e t
he t
ot
al G
D
P 
im
pa
ct f
ro
m t
he d
ire
ct G
D
P i
m
pa
ct g
en
er
at
ed
fr
om t
he t
ou
ri
sm i
nv
es
tm
en
t a
ttr
ib
ut
ab
le t
o 
TI
PT t
o a
ss
es
s t
he b
en
efi
ts o
f T
IP
T.
Th
is m
ul
tip
lier i
s a
lso u
se
d t
o a
ss
es
s t
he e
ffi
-
ci
en
cy l
os
s a
ttr
ib
ut
ab
le t
o T
IP
T a
nd t
he o
pp
or
-
tu
ni
ty c
os
t o
f T
IP
T.
Fi
sc
al
 m
ult
ip
lie
r
Th
e fi
sc
al m
ul
tip
lier i
s d
efi
ne
d a
s t
he c
ha
ng
e i
n 
G
D
P i
n r
es
po
nd
ing t
o a g
iv
en c
ha
ng
e i
n a fi
sc
al
po
lic
y i
ns
tr
um
en
t s
uc
h a
s a c
er
ta
in f
or
m o
f 
go
ver
nm
en
t s
pen
di
ng o
r t
ax c
ol
le
ct
io
n.
It i
s a
do
pt
ed f
ro
m E
st
ev
ão a
nd S
am
ak
e (
20
13
) 
to e
st
im
at
e t
he “
ne
ga
tiv
e” G
D
P i
m
pa
ct o
f 
IT
PT
-a
ss
oc
ia
te
d t
ax e
xp
en
di
tu
re
s.
O
ut
put
 m
ult
ip
lie
r 
of
 in
fr
as
tr
uc
tu
re 
in
ve
st
m
en
t
It i
s a
n “
ou
tp
ut
” m
ul
tip
lier o
n g
ov
er
nm
en
t 
ca
pi
ta
l i
nv
es
tm
en
t i
n p
ub
lic i
nf
ra
st
ru
ct
ur
e. Th
e 
“o
ut
pu
t” h
er
e m
ea
ns G
D
P, a
s c
om
m
on
ly u
se
d 
in m
an
y I
M
F p
ap
er
s. 
It 
is 
ad
op
te
d 
fr
om 
G
an
el
li 
an
d 
Ter
va
la 
(2
01
5) 
to
es
tim
at
e t
he o
pp
or
tu
ni
ty c
os
t o
f T
IP
T a
ss
um
-
ing t
he T
IP
T-a
ss
oc
ia
te
d t
ax e
xp
en
di
tu
re
s w
er
e 
in
ve
st
ed
in
p
ub
lic
in
fr
as
tr
uct
ur
e.

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Document Outline

• Part I
• Tax Incentives—Theoretical Background
  • An overview of key concepts and issues*
    • I. Introduction
    • II. Definition of tax incentives
    • III. Different types of tax competition
    • IV. Additional investment incentives
    • V. Role of non-tax factors
    • VI. Review of empirical evidence
  • Tax incentives: benefits and costs, design and administrative considerations *
    • I. Introduction
    • II. Benefits and costs of tax incentives
      • A. Benefits of tax incentives
      • B. Costs of tax incentives
    • III. Design considerations for tax incentives
      • A. Eligibility issues
      • B. Implementation issues
      • C. Review and sunset provisions
      • D. Guidance for policymakers
    • IV. Conclusion
• Part II
• Tax Incentives—Practical Aspects
  • Checklist for drafting tax incentives legislation: focus on income tax*
    • I. Introduction
    • II. Checklist for drafting tax incentives legislation
    • III. Checklist for drafting tax incentives legislation: commentary
  • The framework for assessing tax incentives: a cost-benefit analysis approach*
    • I. A few fundamentals
    • II. A conceptual preparation
      • A. Defining cost and benefit
      • B. Assessing cost and benefit by stage
      • C. Exploring alternative options
      • D. Conducting sensitivity analysis
      • E. The toolkit for cost-benefit analysis
    • III. A review of two official studies
      • A. The Massachusetts atudy: a report on the Massachusetts film industry tax incentives, April 20, 2016 
      • B. The Nevada Study: economic impact of Tesla on Washoe and Storey counties, September 11, 2014 
    • IV. A prototype model for cost-benefit analysis
    • V. Conclusion
  • References
• Part III
• A Country Experience
  • The tax incentives for tourist industry in the Dominican Republic *
    • I. Introduction
    • II. Dominican Republic’s tourism industry: a historical and regional review
    • III. Assessing the benefit of TIPT
      • A. The tourism investment pattern: multiple perspectives
      • B. The TIPT impact on the Dominican Republic’s tourism investment
      • C. The benefit of TIPT: investment and GDP impact and revenue gain
    • IV. Assessing the cost of TIPT
      • A. The direct revenue loss associated with TIPT, and its negative multiplier effect
      • B. The possible efficiency loss
      • C. The opportunity cost of TIPT
    • V. Conclusion: the net benefit of TIPT
  • References
• Appendices
  • Statutory tax provisions: the Dominican Republic and its regional competitors*
  • Performance of the tourism industry: the Dominican Republic and its regional competitors
  • Defining the database: technical procedures
  • Estimating the benefit of TIPT: technical procedures
  • Estimating the cost of TIPT: technical procedures
  • Three different multipliers: a conceptual clarification