New IMF-backed unit to lock in revenue, cut fiscal risk
The Tax Policy Analysis Unit (TPAU), a structural benchmark under the programme-linked reform framework sponsored by the International Monetary Fund, has been formally operationalised.
The Ministry of Finance has established this unit to mark a significant shift towards evidence-based taxation after a spate of ad hoc policies in the sector.
The TPAU functioning under the Department of Fiscal Policy aims to centre tax policy formulation, appraisal, and monitoring under one entity that has technical specialisation, a senior official of the ministry told the Sunday Times Business.
This decision was taken at a time when the Government plans to capitalise on record revenue gains realised in 2025 while properly addressing old problems on tax design, exemptions, and fairness in distribution, he added.
He described the unit as “a turning point” in fiscal governance. “The establishment of the Tax Policy Analysis Unit is an IMF structural benchmark and a critical reform to ensure that tax policy decisions are grounded in rigorous analysis rather than short-term considerations,” the official said.
The operational commencement of the TPAU was preceded by a capacity-building programme undertaken by the International Monetary Fund during their fact finding mission recently.
The training covered the latest developments in the application of modern tax policy tools like forecasting revenues, analysing expenditures, as well as the modelling of distributions based on universally agreed processes, ministry sources said.
The key functions of the TPAU include revenue analysis, economic analysis of tax policies, and analysis of the distributional impact of tax policies, evaluating tax expenditures, and tax exemptions, engagement of key stakeholders.
“The absence of a dedicated tax policy unit meant that reforms were often piecemeal, poorly costed, and vulnerable to reversals,” the ministry official said. “The TPAU changes that by embedding analytical discipline into the policy process.”
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