Ms. Genevieve Verdier, Brett Rayner, Ms. Priscilla S Muthoora, Charles Vellutini, Ling Zhu, Vincent de Paul Koukpaizan, Alireza Marahel, Mahmoud Harb, Imen Benmohamed, Mr. Shafik Hebous, Andrew Okello, Nathalie Reyes, Thomas Benninger, and Bernard Sanya
Domestic revenue mobilization has been a longstanding challenge for countries in the Middle East and Central Asia. Insufficient revenue has often constrained priority social and infrastructure spending, reducing countries’ ability to reach the Sustainable Development Goals, improve growth prospects, and address climate related challenges. Moreover, revenue shortfalls have often been compensated by large and sustained debt accumulation, raising vulnerabilities in some countries, and limiting fiscal space to address future shocks. The COVID-19 pandemic and the war in Ukraine have compounded challenges to sustainable public finances, underscoring the need for revenue mobilization efforts. The recent global crises have also exacerbated existing societal inequalities and highlighted the importance of raising revenues in an efficient and equitable manner. This paper examines the scope for additional tax revenue mobilization and discusses policies to gradually raise tax revenue while supporting resilient growth and inclusion in the Middle East and Central Asia. The paper’s main findings are that excluding hydrocarbon revenues, the region’s average tax intake lags those of other regions; the region’s fragile and conflict-affected states (FCS) face particular challenges in mobilizing tax revenue; In general, there is considerable scope to raise additional tax revenue; countries have made efforts to raise tax collection, but challenges remain; tax policy design, notably low tax rates and pervasive tax exemptions, is an important factor driving tax revenue shortfalls; weak tax compliance, reflecting both structural features and challenges in revenue administration, also plays a role; and personal income tax systems in the region vary in their progressivity—the extent to which the average tax rate increases with income—and in their ability to redistribute income. These findings provide insights for policy action to raise revenue while supporting resilient growth and inclusion. The paper’s analysis points to these priorities for the region to improve both efficiency and equity of tax systems: improving tax policy design to broaden the tax base and increase progressivity and redistributive capacity; strengthening revenue administration to improve compliance; and implementing structural reforms to incentivize tax compliance, formalization, and economic diversification.
Philip Daniel, Alan Krupnick, Ms. Thornton Matheson, Mr. Peter J. Mullins, Ian W.H. Parry, and Artur Swistak
This paper suggests that the environmental and commercial features of shale gas extraction do not warrant a significantly different fiscal regime than recommended for conventional gas. Fiscal policies may have a role in addressing some environmental risks (e.g., greenhouse gases, scarce water, local air pollution) though in some cases their net benefits may be modest. Simulation analyses suggest, moreover, that special fiscal regimes are generally less important than other factors in determining shale gas investments (hence there appears little need for them), yet they forego significant revenues.
This paper takes stock of the economic performance of resource rich countries in the Middle East and North Africa (MENA) over the past forty years. While those countries have maintained high levels of income per capita, they have performed poorly when going beyond the assessment based on standard income level measures. Resource rich countries in MENA have experienced relatively low and non inclusive economic growth as well as high levels of macroeconomic volatility. Important improvements in health and education have taken place but the quality of the provision of public goods and services remains an important source of concerns. Looking forward we argue that the success of economic reforms in MENA rests on the ability of those countries to invest boldly in building inclusive institutions as well as high levels of human capacity in public administrations.
The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.
This volume, edited by Said El-Naggar, is the fifth in a series of seminars dealing with economic issues of particular importance to the Arab countries. Held in Manama, Bahrain, in February 1993, it covered topics pertaining to economic development of the Arab countries in the nineties. The seven papers that were presented comprised economic reform in the Arab countries, including particularly structural issues; investment policies and capital flows; inter-Arab labor movements; environment and development; development of human resources; and European economic integration. An overview of the topics is presented by the seminar moderator, Said El-Naggar.
IMF economists work closely with member countries on a variety of issues. Their unique perspective on country experiences and best practices on global macroeconomic issues are often shared in the form of books on diverse topics such as cross-country comparisons, capacity building, macroeconomic policy, financial integration, and globalization.