Evaluation of tax subsidies II (2017-2018)
Tax subsidies have to justify their benefits and their effectiveness just like direct subsidies. Economic relevance, efficiency, transparency and sustainability are further criteria under which tax subsidies have to be examined in order to be able to assess if one should maintain, modernize, transform them into a direct subsidy or abolish them. In the years from 2007-2009 the FiFo Köln led a consortium on behalf of the German Federal Ministry of Finance (Bundesministeriums für Finanzen) to evaluate the 20 biggest tax subsidies using uniform public economic criteria.
In the years 2017 and 2018 the next even bigger round of evaluations is due. This time 32 different tax subsidies from the subsidy report published by the federal government will be quantified and thoroughly tested using enhanced uniform methods. The spectrum of assessed taxes range from the income and payroll tax or the vehicle tax to energy and electricity taxes. The effected economic sectors are also very diverse: In addition to subsidies for the commercial sector in general, specific areas are affected such as agriculture, road-, waterborne- and public transport, housing, and urban development as well as savings promotion and the accumulation of capital. Here you can find the list of the 32 evaluated tax subsidies.
The team, with which FiFo Köln won the tender and has begun the evaluation, comprises of the ifo München, the ZEW Mannheim and the Fraunhofer-Institut für Angewandte Informationstechnik (FIT).