Fiscal policy affects macroeconomic stability, growth, and income distribution. Citizens expect their governments to ensure value-for-money for public spending, a fair and efficient tax system, and transparent and accountable management of public sector resources.
Since 1964, the Fiscal Affairs Department (FAD) of the International Monetary Fund has been a leading source of fiscal policy and management expertise worldwide. FAD monitors and analyzes global fiscal trends; advises IMF member countries on fiscal issues directly or in close cooperation with the IMF area departments; and contributes to the design and implementation of IMF-supported programs. FAD’s analysis and research is at the forefront of fiscal policy debates. Its recent work has contributed to the discussion on fiscal policy in the areas of climate change, governance and corruption, sustainable development and public sector balance sheets. Each year, FAD staff and experts provide advisory services to about 150 IMF member countries covering advanced, emerging, and low-income economies.
Public Financial Management: The IMF’s PFM Divisions' main task is to assist member countries in enhancing the performance of their PFM systems by providing capacity development covering all PFM areas. Topics covered by this support include: PFM legal and institutional framework; fiscal rules, fiscal frameworks, and medium-term budgeting; macro-fiscal forecasting and policy; the management and analysis of fiscal risks, budget preparation; performance budgeting; budget execution; internal and external audit, cash and debt management; public investment management/infrastructure governance; government accounting and fiscal reporting; fiscal transparency and governance and anti-corruption; the management of public corporations; public sector balance sheets; and other topics related to budgeting and public finance. Also covered are emerging PFM topics such as green PFM, gender budgeting and digitalization.
Tax Policy: Providing general tax policy reviews and specific tax policy advice, particularly in the areas of income tax (including international corporate taxation), value-added tax, carbon taxation, and taxation of natural resources (including oil and gas) to improve tax systems’ economic efficiency, distributional fairness, and transparency.
Revenue Administration: Strengthening tax and customs administration, including the collection of social security contributions to enhance member countries’ institutional capacity to increase taxpayer compliance and support trade security and facilitation, through the adoption of robust governance and strategic management frameworks, as well as the modernization of core operational functions (including taxpayer service, filing and payment, audit, enforcement collection, and dispute resolution).
Expenditure Policy: Rationalizing public expenditure—including on price subsidies, wage bill, education, health, and social protection systems—in a socially and economically responsible manner, such as increasing the long-term sustainability of pension systems, and reducing the adverse impact of subsidies on vulnerable groups.
Macro-Fiscal Policies and Frameworks: Ensuring more credible fiscal forecasts and transparent intergovernmental relationships, establishing fiscal rules, strengthening the management of fiscal risks, improving fiscal policies in support of environmental sustainability (climate change) and reducing governance and corruption vulnerabilities, and aligning fiscal policies with sustainable development and inclusive growth.