The following is a list of main data sources, methodologies and assumptions that were used in estimating the tax incentives.

- • closely followed ActionAid (2018) to calculate the previous revenue forgone from tax • closely followed ActionAid (2018) to calculate the previous revenue forgone from tax incentives in the three countries. From these calculations we projected and adjusted the estimates of revenue forgone due to tax incentives for the year 2017 whose estimates were not available in any of the countries under study.
- o Malawi, a study by PWC that was commissioned by UNDP in 2016, estimates that o Malawi, a study by PWC that was commissioned by UNDP in 2016, estimates that revenue forgone due to various tax incentives in Malawi was 25%, 15% and 9% of the total revenues for 2014, 2015 and 2016 respectively. Using annualised data on tax revenues from World Bank's World Malawi's Ministry of Finance's and GDP (in current US$) from Development Indicators (WDI) 8 , the revenue forgone was found to be about US$84.5 million representing 1.6% of GDP (ActionAid, 2018). Much of the revenue lost emanated from 9 Industrial Rebate scheme and it excluded some incentives on which data was not available i.e. capita allowances (PWC & UNDP, 2016). We built on this approach and data to further calculate revenue lost to tax incentives in 2014 and 2015 and found it to be US240.9 million and US$145.7 million respectively.
- o Mozambique, IMF (2016) estimates that the country lost 3.3% of GDP in tax incentives o Mozambique, IMF (2016) estimates that the country lost 3.3% of GDP in tax incentives which translates into US$559.7 million. Unlike Malawi, there were no estimates for more than one year.
- o (2018) reports that a Nigerian Inter-Ministerial Committee undertook a partial estimation o (2018) reports that a Nigerian Inter-Ministerial Committee undertook a partial estimation of 52 forms of tax incentives being executed by the Federal Government through various agencies in Nigeria. It was estimated that Nigeria lost about 1.28% of GDP to tax incentives in the period of 2011 and 2015. This translates into about US$1 trillion in revenue forgone. The incentives covered in the estimates mainly included tax waivers and concessions. We used these estimates to calculate revenue lost to tax incentives in 2011 to 2015.
- • estimate revenue lost to tax incentives for the year 2017, we grew the calculated estimates • estimate revenue lost to tax incentives for the year 2017, we grew the calculated estimates by the average annual growth rate (AAGR) of gross fixed capital formation (GFCF) which was calculated for the period 2011 to 2017. The GFCF was arrived at through pairwise correlation with 10 other determinants of foreign direct investment (FDI) like GDP and trade openness. In the pairwise correlation, we also included the computed revenue forgone for the other years so as to establish its main driver out of the rest. So, for Malawi and Nigeria, GFCF was superior to others in terms of driving revenue loss due to tax incentives. Data on all these determinants of FDI was obtained from World Bank's WDI. For Mozambique, pairwise correlation was not possible because we only had one observation of revenue loss i.e. in 2014 only. We therefore, assumed that the same GFCF holds as a key determinant of revenue loss due to tax incentives. The AAGR of GFCF was found to be 2.11%, 11.1% and -1.6% for Malawi, Mozambique and Nigeria respectively. These growth rates were multiplied with the most recent calculated revenue forgone in the countries under review.
- • 2017 revenue forgone due to tax incentives was found to be US$ 88.8 million for Malawi, • 2017 revenue forgone due to tax incentives was found to be US$ 88.8 million for Malawi, US$ 621.8 million for Mozambique and US$1.313 billion for Nigeria. This represents revenue forgone as a percentage of GDPof1.41%, 4.92% and 0.35% for Malawi, Mozambique and Nigeria respectively.

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