IMF Working Papers

Tax Policy in MENA Countries: Looking Back and Forward

By Mario Mansour

May 5, 2015

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Mario Mansour. Tax Policy in MENA Countries: Looking Back and Forward, (USA: International Monetary Fund, 2015) accessed September 19, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews trends in taxation and revenue in MENA countries over 1990-2012, with a focus on non-resource taxes. On average, non-resource revenues declined slightly, while resource revenues soared. Country experiences vary: rates of main taxes and their revenues tend to be higher in the Magreb than in the Mashreq, except for the value-added tax, where lower rates are associated with equal or higher revenue; most oil producers raise little tax revenues—generally less than 5 percent of GDP—and most have reduced them since the late 1990s. But there are similarities: unlike common experience around the world, income taxes (not indirect taxes) have partially compensated for lost revenue from trade liberalization; revenues from indirect taxes have remained stable; personal income taxes have played an unimportant role as a revenue tool; and fees and stamp duties are significant revenue sources. Looking forward, tax reform challenges will also vary across countries: the Maghreb needs to focus on efficiency-enhancing reforms, especially in capital income and consumption taxes; the Mashreq have some room to increase revenue; and, there are ample opportunities to improve equity and reduce complexity of tax systems in all countries. Finally, the recent decline in oil prices and revenues is a reminder that even resource-rich GCC countries need to lay the basis of a tax system for the future.

Subject: Corporate income tax, Revenue administration, Tax incentives, Taxes, Taxes on trade, Value-added tax

Keywords: Building tax institution, Corporate income tax, Excise tax, Income tax, Maghreb, MENA, Personal income, Resource country, Resource revenues, Tax administration, Tax competition, Tax incentives, Tax law, Tax reform, Tax revenues, Tax system, Taxes on trade, Trade tax, Value-added tax, WP

Publication Details

  • Pages:

    51

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2015/098

  • Stock No:

    WPIEA215098

  • ISBN:

    9781484364789

  • ISSN:

    1018-5941