90 Government Finance Statistics Manual 2014
- Th e transfer is an implicit social assistance ben-
efi t (272) if receivable by households intended
to provide for the needs that arise from certain
events or circumstances (see paragraph 6.101),
or - Th e transfer is classifi ed as transfers not elsewhere
classifi ed (282) if receivable by individuals, pri-
vate nonprofi t institutions, nongovernmental
foundations, corporations, or government units,
and the nature of the transfer is not such that
it could be included in the other categories of
transfers (see paragraph 6.122).
5.32 Payable tax credits should be recorded for the
full amount when the tax claim is recognized by govern-
ment regardless of the time when it is paid in cash by
government or used to decrease the amount of taxes to
be paid to government. Gross recording of the payable
tax credit allows GFS to refl ect the economic substance
of government intervention in the economy.^11 Th is
treatment diff ers from the treatment of the imputation
system of corporate income tax (see paragraph 5.44).
Tax attribution^12
5.33 In some cases, one government unit collects
taxes and then transfers some or all of them to an-
other government unit or international organization.
Depending on the arrangement, the taxes passed on
to the second government unit may be reassigned as
tax revenue of that unit or they can be recorded as tax
revenue of the collecting unit and a grant from that
unit to the second government unit.
5.34 A tax is attributed to the government unit
that: (i) exercises the authority to impose the tax (ei-
ther as a principal or through the delegated author-
ity of the principal); and (ii) has fi nal discretion to set
and vary the rate of the tax.
5.35 Where an amount is collected by one govern-
ment for and on behalf of another government, and
the latter government has the authority to impose the
tax, and to set and vary its rate, then the former is act-
ing as an agent for the latter. Th e full amount of tax(^11) For example, when tax credits on customs and other import
duties (1151) on raw materials are used to support producers of
exports, the full amount of customs and other import duties (1151)
should be refl ected, as well as the subsidy (25) to the producers of
the exports.
(^12) Similar attribution principles could be applied to subsidies or
social benefi ts.
raised is assigned as tax revenue to the government on
whose behalf the collection was made. Any amounts
retained by the collecting government as a collection
charge should be recorded as a payment for a service,
classifi ed as the relevant category of sales of goods and
services (142). Th e same amount is recorded as an ex-
pense for use of goods and services (22) by the counter-
party. Any other amounts retained by the collecting
government, such as under a tax-sharing arrange-
ment, should be recorded as current grants (1331)
receivable while the counterparty will record current
grants (2631) payable. If the collecting government
was delegated the authority to set and vary the rate,
then the amount collected should be recorded as tax
revenue of the collecting government.
5.36 Where diff erent governments jointly and
equally set the rate of a tax, with no individual gov-
ernment having ultimate overriding authority, then
the tax revenues are attributed to each government
according to its respective share of the proceeds.^13 If
an arrangement allows one government unit to exer-
cise ultimate overriding authority, then all of the tax
revenue is attributed to that unit.
5.37 Th ere may also be circumstances where a tax is
imposed under the constitutional or other authority of
a government unit or an international organization,^14
but participating governments individually set the
tax rate in their jurisdictions. Th e proceeds of the tax
generated in each respective government’s jurisdic-
tion are attributed as tax revenues to the individual
government units.
5.38 When taxes are collected by an institutional
unit other than a government unit, the tax is always
reassigned to the government unit that permitted the
nongovernment unit to act as a collecting agent (see
paragraph 5.2). For example, a public corporation
may act as an agent to collect a specifi c tax on behalf
of government. In this case, the taxes collected by the
public corporations should be recorded as transac-
tions in fi nancial assets and liabilities for the collect-
ing agent, and the full amount collected should be
(^13) Th ese respective shares of the proceeds should refl ect the
underlying taxable economic event. If, under the revenue shar-
ing arrangement, these shares amount to more or less than the
underlying taxable economic event, a transfer for the diff erence
should be recognized.
(^14) For a discussion on the tax attribution in the case of suprana-
tional authorities and regional cooperation, see Appendix 5.