The National Audit Office examined 10 tax breaks in detail to see whether the government was monitoring them properly.
It found data was not always held on the cost of reliefs to the public purse, even when it was thought to be in the order of hundreds of millions of pounds.
HMRC rarely assessed if tax breaks were having the desired effects on behaviour, or whether they were being widely abused.
Of 46 high-value reliefs with economic or social objectives, 11 had increased by at least a quarter in real terms since 2007.
Although the department had theories as to why the costs may have shifted, "it tended to seek the most obvious explanation and did not try to definitively rule out abuse", the report said.
A spending watchdog has said that billions of pounds in tax could have been dodged because the government is failing to track abuse of reliefs.
The National Audit Office (NAO) found HM Revenue & Customs (HMRC) had done little to investigate why Entrepreneurs' Relief introduced in 2008 was costing the public purse £2 billion a year more than expected.
Claims for share loss relief soared by more than 300% to £1.2 billion in 2006/07 after a number of aggressive avoidance schemes appeared - but the taxman did not identify the scale of the increase until 2013.
Tax evaders are being pursued at "unacceptably slow" levels by HM Revenue and Customs, putting millions of pounds due for Treasury coffers at risk, according to a critical report by MPs.
The agency has also overstated the success of its attempts to crackdown on the practise because its targets were set too low, the Public Accounts Committee found.
MPs warned that up £10 million of the total £400 million tax at stake may not be recoverable because HMRC failed to start inquiries into 30 cases within the legal deadline.
Public accounts committee chair Margaret Hodge said: "HMRC must do more, faster. It should report on the progress it has achieved by using new powers granted by Parliament to tackle tax avoidance and show that it is using its existing powers with sufficient urgency.
"HMRC does not do enough to tackle companies which exploit international tax structures to minimise UK tax liabilities."
David Cameron said he feels a "moral duty" to cut taxes and claimed the average worker will save £3,800 by 2020 under a future Conservative government.
Writing in The Times, the Prime Minister issued a reminder of his promise of tax cuts worth £7.2 billion to 30 million voters.
He has pledged to raise the threshold at which workers pay the higher 40p rate of income tax to £50,000, while increasing the personal allowance below which no tax is payable to £12,500.
It is morally right that the rich pay their fair share in tax; and right that those who are able to contribute to our public services and safety nets do so.
Taking aim at Labour spending he said "we must be mindful of who picks up the bill" but the Opposition accused him of failing to explain how reductions would be paid for and ignoring the impact of benefit cuts on low-paid families.
Shadow Treasury chief secretary Chris Leslie said: "David Cameron will be judged on his actions, not his words. He's raised taxes 24 times.
"While millionaires have been given a huge tax cut, ordinary working people are paying more because he raised VAT and cut tax credits."
A spokesman for the Driver and Vehicle Licensing Agency has said that changes to the rules of tax discs will not affect the agency's ability to enforce the law:
There is absolutely no basis to these figures and it is nonsense to suggest that getting rid of the tax disc will lead to an increase in vehicle tax evasion.
We have a proven track record in making vehicle tax easy to pay but hard to avoid, with over 99% of all vehicles taxed. Given the systems now in place we take enforcement action direct from our electronic records rather than requiring a tax disc.
The chief engineer for RAC has said that a survey shows there is "clearly concern among motorists about forthcoming changes to tax disc rules:
There is clearly concern among motorists over the issue of enforcement. Most of the changes make sense and will benefit the motorist, but too many motorists are unaware of the detail.
The big question has to be whether enforcement using only cameras and automatic number plate recognition will be sufficiently effective.
An RAC survey of more than 2,000 drivers showed that almost two-thirds of respondents believe changes to the rules on tax discs would prompt more tax evasion.
- 36% were unaware of the scrapping of the paper disc
- 47% did not know when the change was due to take effect
- 63% feared there would be a rise in the number of untaxed cars on the road
- 44% reckoned the change would actually encourage people to break the law
Next month's ending of the need to display a car tax disc could lead to tax evasion costing the economy £167 million a year, according to the RAC.
It said it feared that the number of tax-dodgers could equal the number who try to avoid paying motor insurance.
RAC chief engineer David Bizley said: "We could be looking at around £167 million of lost revenues to the Treasury, far exceeding the £10 million that will be saved by no longer having to print tax discs and post them to vehicle owners."
From October 1, motorists will no longer need to display a tax disc on their vehicle windscreen. They will still need to pay their vehicle excise duty car tax, with records being monitored electronically.
The RAC has urged the government to act as up to 15,000 foreign cars go unregistered every year costing them an estimated £3 million.Read the full story ›
Millions of people face having to hand money back to HMRC after errors meant they ended up paying the wrong amount of tax on their earnings.
It is estimated that 5.5 million people have paid the wrong amount of tax, with 3.5 million thought to have paid too little and the remaining 2 million having overpaid, meaning they can claim a refund.
The mistakes can occur due to a change in personal circumstances, such as if a person moves jobs or starts receiving benefits.
According to tax officials cited by the Daily Telegraph, the average size of the error is about £300.
This is despite the introduction of a new £270 million 'Real Time Payments' scheme designed to make the tax system more accurate by letting people update their information on a weekly or monthly basis.