Dubai: IMF chief calls for increasing tax revenues in MENA region

Dubai: IMF chief calls for increasing tax revenues in MENA region

The International Monetary Fund (IMF) chief on Sunday called for increasing tax revenues in the GCC and wider Mena region, despite making some good progress in the tax base by the regional countries.

Kristalina Georgieva, managing director of IMF, said the average tax-to-GDP ratio is less than half of what could potentially be collected and called for phasing out inefficient tax exemptions.

Several regional countries, including the UAE, have introduced taxes in the past few years in order to boost revenues away from the petrodollars and create a more sustainable source of income for the economies.

After value-added tax (VAT) on consumer goods and services, and excise tax on tobacco and energy and soft drinks, the UAE is set to levy corporate income tax from this year at nine per cent. Meanwhile, Bahrain and Saudi Arabia have also raised substantial revenue by introducing value-added taxes.

“If we are to invest in a more resilient future, we will need to further strengthen tax policy and administration. Many countries in the region have made good progress in expanding their tax capacity. And yet, the average tax-to-GDP ratio, excluding hydrocarbon-related revenue, remains at about 11 per cent — less than half of what could potentially be collected,”