Technical Notes and Manuals
Technical Notes and Manuals are produced by IMF departments to expand the dissemination of their technical assistance advice. These papers present general advice and guidance, drawn in part from unpublished technical assistance reports, to a broader audience. This new series launched in September 2009.
2021
August 27, 2021
The Revenue Administration Gap Analysis Program: An Analytical Framework for Personal Income Tax Gap Estimation
Description: It is generally difficult to measure revenue not collected due to noncompliance, but a growing number of countries now regularly produce and publish estimated revenue losses. Good tax gap analysis enables the detection of changes in taxpayer behavior by consistent estimates over time. This Technical Note sets out the theoretical concepts for personal income tax (PIT) gap estimation, the different measurement approaches available, and their implications for the scope and presentation of statistics. The note also focuses on the practical steps for measuring the PIT gap by establishing a random audit program to collect data, and how to scale findings from the sample to the population.
August 10, 2021
Integrating the Collection of Social Insurance Contributions and Personal Income Taxes
Description: This technical note addresses the following questions: • What are the main ways in which different countries assess and collect personal income tax (PIT) and social insurance contributions (SIC) liabilities (Section I)? • What is the case for transferring responsibility for a country’s SIC collection from its social insurance agency(ies) to its tax authority (Section II)? • What changes does such integration of collection functions involve (Section III)? • Are there any lessons from international experience to guide such reforms (Section IV)? • How to build on these lessons when planning a transfer of collection functions (Section V)? • Are there any beneficial alternatives to full integration of functions (Section VI)?
June 23, 2021
DIGNAR-19 Toolkit Manual
Description: This note is a user’s manual for the DIGNAR-19 toolkit, an application aimed at facilitating the use of the DIGNAR-19 model by economists with no to little knowledge of Matlab and Dynare via a user-friendly Excel-based interface. he toolkit comprises three tools—the simulation tool, the graphing tool, and the realism tool—that translate the contents of an Excel input file into instructions for Matlab/Dynare programs. These programs are executed behind the scenes. Outputs are saved in a separate Excel file and can also be visualized in customizable charts.
May 28, 2021
A Guide and Tool for Projecting Public Debt and Fiscal Adjustment Paths with Local- and Foreign-Currency Debt
Description: This guide presents the analytical underpinnings and a user manual for the Excel-based Public Debt Dynamics Tool (DDT).
May 21, 2021
Administering the Value-Added Tax on Imported Digital Services and Low-Value Imported Goods
Description: This technical note and manual (TNM) addresses the following questions: (1) What are the main challenges in administering the value-added tax on imported digital services and the measures that countries have introduced to address the challenges?; (2) What are the main challenges in administering the value-added tax on low-value imported goods and the measures that countries have introduced to address the challenges? ;and (3) What are the key tasks in implementing the measures for improving the administration of the value-added tax on imported digital services and low-value imported goods?
May 7, 2021
How to Assess Country Risk: The Vulnerability Exercise Approach Using Machine Learning
Description: The IMF’s Vulnerability Exercise (VE) is a cross-country exercise that identifies country-specific near-term macroeconomic risks. As a key element of the Fund’s broader risk architecture, the VE is a bottom-up, multi-sectoral approach to risk assessments for all IMF member countries. The VE modeling toolkit is regularly updated in response to global economic developments and the latest modeling innovations. The new generation of VE models presented here leverages machine-learning algorithms. The models can better capture interactions between different parts of the economy and non-linear relationships that are not well measured in ”normal times.” The performance of machine-learning-based models is evaluated against more conventional models in a horse-race format. The paper also presents direct, transparent methods for communicating model results.
April 1, 2021
Using Macroeconomic Frameworks to Analyze the Impact of COVID-19: An Application to Colombia and Cambodia
Description: This technical note and manual (TNM) addresses the following issues: • Evaluating the full implications from the policies adopted to mitigate the impact of the COVID-19 pandemic on the economy requires a well-developed macroeconomic framework. This note illustrates how such frameworks were used to analyze Colombia and Cambodia's shock impact at the beginning of the pandemic. • The use of macroeconomic frameworks is not to infer general policy conclusions from abstract models or empirical analysis but to help policymakers think through and articulate coherent forecasts, scenarios, and policy responses. • The two country cases illustrate how to construct a baseline scenario consistent with a COVID-19 shock within structural macroeconomic models. The scenario is built gradually to incorporate the available information, the pandemic's full effects, and the policy responses. • The results demonstrate the value of combining close attention to the data, near-term forecasting, and model-based analyses to support coherent policies.
2020
December 22, 2020
The Case for Depositor Preference
Description: This technical note and manual (TNM) addresses the following issues: advantages and disadvantages of different types of depositor preference, international best practice and experience in adopting depositor preference, and introducing depositor preference in jurisdictions with or without deposit insurance.
November 10, 2020
Tax Administration: Designing a Business Continuity Plan for an Epidemic
Description: This technical note and manual (TNM) addresses the following questions: What is a business continuity plan (BCP) and what are its main components? What are a BCP’s key design considerations for an epidemic? What are the organizational and management arrangements for a BCP? How does a BCP maintain a tax agency’s critical functions during an epidemic? and How does a tax agency keep its BCP current and ready for deployment?
2019
December 13, 2019
The Role of Bank Diagnostics in IMF-Supported Programs
Description: Diagnostic studies are essential to IMF programs in situations of significant bank weakness and when regular disclosures are not reliable. Restoring bank solvency is key to maintaining financial stability and, therefore, the ultimate policy objectives of a Fund-supported program. Bank diagnostics aim to ensure that existing potential losses and capital needs are identified in a timely manner and, in case public support is needed, the relevant cost is prudently incorporated in the program financing envelope. Diagnostic studies provide assurances that financial stability risks are reasonably quantified and provide information essential to: (i) understanding the scale and scope of banking sector problems; (ii) executing strategies for bank resolution and restructuring, including quantifying recapitalization needs; and (iii) estimating any financing needs with reasonable certainty. There is no single template for diagnostic studies that fits all cases. Though an asset quality review (AQR) will always be a central component, there are other aspects, such as stress tests or reviews of bank viability and funding structures, whose relevance depends on country circumstances. While a diagnostic exercise provides a point-in-time snapshot, it can go further and be seen as part of a process of discovery and remediation of the factors at the root of the banks’ problems. Diagnostics are undertaken by local authorities based on a robust governance structure that provides credibility and quality assurance through independent, external participation. Diagnostics should consider local conditions and, where resources are available and qualified, be performed with local participation to enhance ownership and political acceptance. Communication is a key consideration, with the level of information released publicly often being dictated by circumstances. This note provides practical guidance, drawing on experience. Rather than looking at diagnostics as a narrow capital compliance event, the note advocates a building block approach to assessing banking businesses, and to enable forming a view on long-term viability as a basis for action with respect to each institution reviewed. Features of observed international practice are also summarized, drawing on recent diagnostic studies in Europe, and on extensive earlier experiences in a range of emerging and developing country contexts.