Chapter 4 | Page 173 management of public finances.148 The policy goal of gradually reducing public deficits to arrive at a budget balance was also identified.149 Overall, in relation to structural issues associated with domestic revenue generation, the majority of reports provide some insights into taxation policy, revenue challenges, debt management and fiscal policy.150 This shows the importance attached to these policy areas by reporting States as part of their ESC rights implementation strategies. 4.4.1.2 State practice: Process issues Enhancing tax collection is another indispensable aspect of tax administration. Most States, however, did not make direct reference to their tax revenue efforts. Costa Rica described the government’s efforts to improve tax collection and to control public spending and internal debt, as well as monetary policy stances targeted at controlling inflation and liquidity problems.151 Ireland identified the important role of its new taxation policy in modernising the institutional and legal framework of taxation, which had positive impacts on economic and social development and equity in redistribution of national income.152 A common strategy used by developing countries to attract investment, especially direct foreign investment, is to offer various forms of tax incentives and tax holidays. However, analysis of the role of incentives in attracting foreign investment shows mixed results, with ‘spectacular successes as well as notable failures in their role as facilitators of FDI’.153 Evidence shows that incentives are secondary in attracting investments, and factors such as market 148 CESCR, State Report: Mexico, E/C.12/4/Add.16 (25 February 2005), [1135]. 149 Ibid., [1136]. 150 Out of 136 reports analysed, taxation is addressed in 107 reports, revenue in 53, fiscal policy 135 and debt in 62 reports. 151 CESCR, State Report: Costa Rica, E/C.12/CRI/4 (22 June 2006), [367]. 152 CESCR, State Report: Ireland, E/C.12/IRL/3 (8 November 2013), [66]. 153 United Nations Conference on Trade and Development, 'Tax Incentives and Foreign Direct Investment: A Global Survey' (ASIT Advisory Studies No. 16 UNCTAD, 11) <http://unctad.org/en/Docs/iteipcmisc3_en.pdf>.

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