May 18, 2022

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35.8% tax share in the general income of the Arab countries

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The share of tax revenue in the Arab world is 35.8% of general revenue (approximately 10.3% of GDP), which highlights the need to focus on pursuing indirect tax reform and address structural challenges by facilitating value-added tax systems and select taxes. And expanding their base.According to Dr. Abdul Rahman bin Abdullah Al Hamidi, Director General of the Arab Monetary Fund and Chairman of the Board of Directors.

He stressed this in his speech during the Fourth Regional Forum for Taxes in Arab Countries held yesterday through video communication technology in collaboration with the International Tax and Investment Center. Encouraging comprehensive and sustainable development in parallel with strengthening recovery efforts and financial conditions, among the economic and financial challenges left by the Govt-19 epidemic.

The forum was held with the participation of experts from regional and international financial institutions and in the presence of finance and tax authorities and officials in the Arab countries on “Economic Recovery and Tax Policies for Improving Comprehensive and Sustainability”. Development of the post-coronavirus crisis. “

In this context, al-Hamidi stressed the importance of tax policies in promoting recovery and the process of comprehensive and sustainable economic growth, in parallel with the strengthening of financial conditions in the next phase. He pointed out that the challenge lies in how to balance the achievement of these overlapping goals, the achievement of which requires the selection of the appropriate combination of alternatives available to fiscal and tax policies, in light of current international developments. The global economic growth forecast for 2022 is projected at 4.4%, and inflation is expected to rise by at least three percentage points in the same year above previously estimated rates.

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In a related context, the Director General of the Arab Monetary Fund pointed to the importance of “safe exit” from short-term tax practices and measures taken to mitigate the adverse effects of the epidemic. Financial and monetary incentive packages launched by Arab countries from the outbreak of the epidemic until January 2022. This is about US $ 389 billion, of which about 121 billion (31% representation) are fundraisers initiated by the Ministries of Finance. Arab countries .. Consider synchronization with economic recovery plans, pointing out the need for a step-by-step strategy to get out of these packages.

Al-Hamidi touched on a number of tax policy options that could be relied upon to drive economic growth in parallel with strengthening the financial position, pointing out that the share of tax revenue in Arab countries is more than one-third of general revenue. About 35.8% / 10.3% of GDP can be achieved. Taxes on environmentally friendly practices, the implementation of taxes on digitalization based transactions, in addition to the importance of building reforms achieved in the field of tax administration and the continuation of efforts to digitalize tax services, paved the way for modern tax administration. This increases tax compliance.

He pointed to the need to create a local tax framework to keep pace with the evolution of the global tax system reforms and to benefit from the recent positive developments in the field of tackling tax challenges in the digital economy.

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