---
title: "Tax Expenditure: Revenue Foregone Explained | Model Diplomat"
description: "A tax expenditure is revenue foregone through exemptions and deductions that act as hidden subsidies. See how India's Statement of Revenue Forgone reports it."
url: "https://modeldiplomat.com/learn/glossary/tax-expenditure"
---

[New](https://modeldiplomat.com/)

#

Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- A tax expenditure is government revenue foregone through exemptions, deductions, rebates, and concessional rates that deviate from a benchmark tax structure to favour particular activities or taxpayers.
- Why can't individual tax expenditure estimates be added into a single total?
- How does the revenue foregone method differ from the revenue gain method?
- Why did India rename its 'Statement of Revenue Forgone'?
- How is a tax expenditure different from a direct subsidy?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

A tax expenditure is government revenue foregone through exemptions, deductions, rebates, and concessional rates that deviate from a benchmark tax structure to favour particular activities or taxpayers.

Go beyond the definition

## Research Tax Expenditure (Revenue Foregone) like a delegate

Model Diplomat's AI drafts position papers, speeches, and country research with real sources — built for MUN and politics students.

## Research it like a delegate

Research on modeldiplomat.com

## Ask a follow-up about Tax Expenditure (Revenue Foregone)

Open a cited briefing in Model Diplomat search — timelines, positions, and sources you can use in committee or exam answers.

[Start research on Tax Expenditure (Revenue Foregone)](https://modeldiplomat.com/search?q=Explain%20Tax%20Expenditure%20\(Revenue%20Foregone\)%20%E2%80%94%20key%20dates%2C%20actors%2C%20positions%2C%20and%20sources)

Example

In its 2015-16 Union Budget, Indian Finance Minister Arun Jaitley cited revenue foregone estimates exceeding ₹5 lakh crore to justify a phased withdrawal of corporate tax exemptions in exchange for a lower headline rate.

Keep learning

## Go deeper than the definition

[Explore all Civil Service & Diplomatic Exams lessons](https://modeldiplomat.com/learn/civil-services)[Test yourself with a quiz](https://modeldiplomat.com/learn/glossary/quiz/civil-services)

## Take Tax Expenditure (Revenue Foregone) beyond the glossary

Ask the AI research engine built for diplomacy — get briefings, position papers, and speeches with sources you can cite in committee.