Rationale and definition:
L￼ack of fiscal transparency weakens government accountability and increases ￼￼opportunities for corruption or poor management, ultimately undermining progress towards the SDGs. ￼Government revenues and budgets are often difficult for stakeholders to track. Increasingly, however, fiscal transparency has become the norm, bolstered by international standards like the recently updated IMF Guide on Fiscal Transparency.1 Transparency strengthens the opportunities for public oversight by allowing for public engagement in budgeting processes and for public scrutiny of discrepancies. These discrepancies can exist between revenue and expenditure data, as well as other published data including payments by companies and corporate tax disclosures. Public scrutiny can help identify both national discrepancies as well as intentional discrepancies, caused, for instance, by Base Erosion and Profit Shifting (BEPS) and illicit flows. This is particularly important in the context of natural resource revenues, which present greater risks of mismanagement and corruption, as recognized by Pillar IV of the IMF Fiscal Transparency code, which focuses on Resource Revenue Management. Importantly, budget transparency will facilitate tracking of domestic resource mobilization and expenditures towards the SDGs.
This indicator, based on Pillars II and IV of the IMF Fiscal Transparency Code, measures the timely publication of revenues, expenditures, and financing of all central government entities, and that this data is presented on a gross basis in public budget documentation and authorized by the legislature. Revenues include taxes, royalties, dividends, bonuses, license fees, payments for infrastructure improvements, payments in kind, or any other significant payment and material benefit.2 Importantly, “expenditures” refers to all expenditures, including off-budget expenditures, which is particularly important with natural resource revenues, which are often not allocated through the national budget. This indicator also includes monitoring on the use of fuel subsidies, which can be a large extra-budgetary expenditure in a number of countries.
This indicator would track the publication of all revenues and expenditures as follows:
- 100: Public budget documentation incorporates all gross domestic and external revenues, expenditures, including off-budget and tax expenditures (including fuel subsidies), financing by central government ministries, agencies, extra-budgetary funds, and social security funds. Government also reports on resource revenue collections by project;
- 66: Public budget documentation incorporates all gross domestic tax and non-tax revenues, expenditures, and financing by central government ministries, agencies, and extra-budgetary funds. Government also reports on resource revenue collections by project;
- 33: Public budget documentation incorporates all gross domestic tax revenues, expenditures, and financing by central government ministries and agencies;
- 0: The government does not publish revenues and expenditures.
Resource revenues should be disaggregated by project and company.
Comments and limitations:
Preliminary assessment of current data availability by Friends of the Chair:
Primary data source:
Administrative data and international monitoring.
Potential lead agency or agencies:
IMF, UN Global Compact, EITI, and/or UNCTAD.
See IMF (2014). Update on the Fiscal Transparency Initiative.
Collier, P and Antonio, P et al. (2013).