Governance of Tax Incentives: Monitoring and Control Mechanisms in the Context of the 2023 Tax Reform

Abstract

This article examines the performance evaluation mechanisms for tax benefits established by the 2023 Brazilian Tax Reform and proposes a governance framework for their efficient management. The research problem lies in the lack of accountability and legitimacy of tax benefits. These involve public revenue exemptions granted under the justification of fostering development or addressing socioeconomic issues and regional inequalities. However, their implementation and maintenance are often linked to economic pressures, despite the questionable efficiency of such measures. The existing legal and institutional instruments for controlling tax benefits have proven inadequate in terms of oversight, revealing a governance deficit. The article aims to identify and critically assess the tools used to monitor, evaluate, and control tax benefits and, based on these findings, propose a more efficient governance framework for their management. The research is theoretical in nature, employing bibliographic techniques and procedures, and adopts an inductive approach in its analyses. The results indicate that the performance evaluation mechanisms for tax benefits defined in the context of the 2023 Brazilian Tax Reform are robust but fail to address current issues related to the granting and review of tax revenue exemptions. It concludes that a governance framework integrated into the IBS Management Committee, functioning as an advisory body represents a potentially effective solution to the proposed issue.