The IMF published on April 20, 2020 the following notes in its Special Series on COVID-19. The notes discuss PFM issues and other fiscal topics. The Special Series notes are produced by IMF experts to help member countries address the economic effects of COVID-19. |
Digital solutions for direct cash transfers help to identify and validate intended beneficiaries, make payments in a timely and secure manner, and ensure transparency and accountability by providing a reliable audit trail and publishing timely data.
Keeping the receipts” (as governments “do what it takes” to support people and firms during the global pandemic and economic downturn) requires strong fiscal transparency, public accountability and institutional legitimacy.
Covid-19 is challenging revenue administrations’ operations; they must act quickly to ensure staff and taxpayer safety while implementing governments’ responses, delivering essential services and safeguarding tax collection.
Forecasting tax revenue during the pandemic is challenging. Standard buoyancy approaches likely overestimate revenues. A disaggregated approach using information on the sector- and tax-specific impact of the pandemic improves forecasts.
Expenditure policies can help mitigate the economic impact of the pandemic through liquidity support for firms, preserving employment linkages and supporting households. Design is the key to their effectiveness and efficiency.
The COVID-19 crisis won’t have a lasting impact on climate change, but the response will—fiscal policymakers should thus aim to make the recovery green.
Universal transfers can complement existing household income support programs, by reducing temporary or permanent coverage gaps. Their impact will be stronger if a basic delivery system is in place.
The immediate response to the outbreak should be to increase spending for mitigation and medical treatment. Costs will depend on country-specific factors, e.g. virus exposure, capacity of health systems, and effectiveness of mitigation measures.
Economy-wide tax measures should also apply to extractive industries hit by lower commodity prices. Only in exceptional cases would additional relief be appropriate.
Covid-19 is challenging customs administrations’ operations; they should take urgent measures to sustain international supply chains and implement governments’ health and economic relief policies while continuing addressing compliance.
Income transfers require a basic data and delivery system—citizen ID, financial inclusion, income data—often missing in LIDCs. Implementation can rely on broadening current schemes, relaxing regulations and using alternative data sources.
This article is part of a series related to the Coronavirus Crisis. All of our articles covering the topic can be found on our PFM Blog Coronavirus Articles page.
Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.
