A Smart Accounting Framework for Evaluating and Measuring the Effectiveness of Tax Incentives: An Applied Comparative Evidence from Egypt

Purpose and Design
This paper develops a Smart Accounting Framework for evaluating and measuring the effectiveness of tax incentives, integrating accounting-based indicators with fiscal and economic performance measures. The framework aims to provide a unified and data-driven tool to assess whether tax incentives achieve their intended objectives in a transparent, efficient, and equitable manner. The research applies this framework comparatively using empirical evidence from Egypt as an applied case.
Methods and Approach
A mixed-method approach was adopted, combining quantitative analysis through the construction of the Composite Tax Incentive Effectiveness Index (CTIEI) with qualitative assessment derived from structured interviews and policy document reviews. Statistical techniques such as Difference-in-Differences (DiD), cost–benefit analysis, and sensitivity testing were employed to ensure the robustness of the results.
Findings
The study demonstrates that the proposed smart accounting framework effectively quantifies both the fiscal cost and developmental outcomes of tax incentives. Results indicate that incentive effectiveness depends on governance quality, administrative cost efficiency, and compliance behavior among beneficiaries.
Originality and Value
This paper offers one of the first integrated accounting-based frameworks for evaluating tax incentive effectiveness in emerging economies. It bridges the gap between fiscal policy evaluation and practical tax accounting measurement.
Theoretical, Practical, Economic and Social Implications
Theoretically, it contributes a structured measurement model for incentive evaluation. Practically, it supports policymakers and tax auditors in designing transparent incentive systems. Economically, it enhances fiscal sustainability assessment, and socially, it promotes fairness and accountability in tax reform.