Plain meaning
A tax measure such as a credit, deduction, exemption, deferral, or preferential rate that reduces or changes government revenue compared with a benchmark tax system.
Also called
tax expenditures
Key points
- Tax Expenditure is an economic or public-finance concept used to understand the setting around tax and budget decisions.
- The concept usually affects households and businesses indirectly through prices, borrowing costs, investment, government revenue, or program spending.
- Official releases often use the concept to explain why a policy is being introduced, extended, delayed, or financed.
- Tracking it helps readers connect a headline number or market development with later tax, benefit, tariff, or spending choices.
Why it comes up
Tax expenditure reports help show the fiscal cost and policy purpose of credits, deductions, and preferential tax measures.