Revenue Diversification in the Arab World: Challenges and Opportunities

Dubai, UAE

February 12, 2017

The Arab Fiscal Forum titled “Revenue Mobilization and Diversification in the Arab World: Challenges and Opportunities” provides an opportunity for Ministers and Senior Officials to discuss the challenges that policy makers in the region are facing and exchange experiences on revenue mobilization. The focus will be on policy options to promote inclusive and sustainable growth, including strategies to develop non-oil revenues, formulate equitable and efficient taxation policies, particularly value added tax, and highlight regional and international experiences with significant tax reforms. Revenue reform is crucial in the Arab World to ensure macroeconomic stability, while enhancing economic and social development. A number of Arab countries, both oil exporters and importers alike, face budgetary pressures. Oil exporters struggle with the persistent fiscal impact of oil revenue volatility. Others confront important long-term development needs, and societal demand for greater equality of opportunities and fairness. This implies more spending on social development including infrastructure, healthcare, and education that will drive potential growth over the medium term. In addition, more reliable sources of revenue would help avoid volatility in public expenditure and pro-cyclical fiscal policy. This would help strengthening growth and job creation as well as help to maintain debt sustainability and reinforce resilience. It also provides a unique opportunity to design tax systems that emphasize fairness, simplicity, and efficiency. While the Arab region has recently seen notable progress toward tax reform, more needs to be done. Although the engaged reform Programs are encouraging, more efforts are required to address the revenue challenges. As key revenue reforms over the past two decades moved in the right direction, but more are required for boosting tax ratios, equity and efficiency.

Jointly organized by the Arab Monetary Fund and the International Monetary Fund.

7:30 – 8:00

Registration

8:00 – 8:30

Opening Session

Welcome addresses by:

  • H.E. Obeid Humaid Al Tayer, Minister of State for Financial Affairs, Ministry of Finance, UAE
  • H.E. Abdulrahman A. Al Hamidy, Director General Chairman of The Board, Arab Monetary Fund

Keynote Speaker

  • Mme Christine Lagarde, Managing Director, IMF

8:30 – 11:45

Morning Session: The role of revenue mobilization in building sustainable and inclusive growth

Raising tax revenue is key in most Arab countries, if governments are to continue playing their role in economic and social development, while ensuring macro-economic stability. Since the first Arab Fiscal Forum last year, the GCC member states have taken concrete steps to develop their non-oil revenue systems. In North Africa, Tunisia and Morocco have held national dialogues on taxation, followed by policy actions. This session examines the key challenges that the region is facing in mobilizing revenue, and how such challenges might be addressed, especially given challenging political and security constraints.

8:30 –10:00

Session 1: Revenue Mobilization and Diversification: Recent Developments and Challenges Ahead

Chair: H.E. Badr Elddine Mahmoud Abbas, Minister of Finance & National Economy, Sudan, Chairman of the Council of the Arab Finance Ministers (10 min).

  • Keynote Speaker: Abdelhak Senhadji, Deputy Director, Fiscal Affairs Department, IMF (30 min)
  • Discussants: HEs Ministers of Finance from Arab countries (20 min):

H.E. Mohamed Boussaid, Minister of Economy and Finance, Kingdom of Morocco,

H.E. Dr. Hamad S. Al-Bazai, Vice Minister of Finance, Kingdom of Saudi Arabia.

Discussion: 30 minutes

10:00 –10:15

Coffee

10:15– 11:40

Session 2: How Can Arab Countries Overcome Challenges in Revenue Mobilization

Chair: H.E. H.E. Dr. Hadji Baba Ammi, Minister of Finance, the People's Democratic Republic of Algeria (10 min)

  • Ministers of Finance from Arab countries (45 min)

H.E. Amr EL Garhy, Minister of Finance, Arab Republic of Egypt,

H.E. El Moctar Ould Djay, Minister of Economy and Finance, Islamic Republic of Mauritania,

Mr. Vitor Gasper, Director, Fiscal Affairs Department, IMF

Discussion: 30 minutes

11:40 - 13:45

Lunch

12:00

Opening of the Global Government Summit (Ministers)

13:45 –16:30

Afternoon Session: Policy and Administration Issues in Support of Revenue Mobilization

Revenue mobilization, in particular in GCC countries, means that significant policy and administration initiatives need to be taken—and, indeed, some are already being put in place. Given differing country situations across the region, emphasis on consumption taxes is appropriate in some countries in the medium term. Building or reforming existing tax and customs administration will play a key role in the success or failure of revenue mobilization efforts. This session will explore: (1) experience in consumption tax reform around the world, and how it may inform current initiatives in the region, including a coordinated GCC consumption tax system; and (2) the fundamentals of building a modern tax administration.

13:45 –15:00

Session 3: The role of consumption taxes in revenue mobilization—VAT and Excise Taxes

Chair Mr. Alain Bifani, Secretary General of Ministry of Finance, Lebanon

  • Mario Mansour, IMF (20 min) – experience with consumption taxes around the world,
  • H.E. Younis Al Khoori, Undersecretary Ministry of Finance, UAE (8 min) –

key policy design and administration issues for the GCC consumption tax system,

  • Dr. Adel Abdul Moneim, Tax Administration, Sudan (8 min) –

Sudan perspective for VAT tax reform,

  • Mr. Khalad Zazou, Tax Administration, Morocco (8 min) – lessons from reforming old VATs in North Africa.

Discussion: 30 minutes

15:00 –15:15

Coffee

15:15 –16:30

Session 4: Building a modern tax administration

Chair: Mr. Vitor Gasper, Director, Fiscal Affairs Department, IMF

  • Deborah Wetzel, Senior Director for Governance Global Practice, World Bank (20 min) –

15 years of tax administration reforms in the Arab region: what have we learned

  • Mr. Amr ElMonayer, Vice Minister of Finance for Tax Policy, Egypt, (10 min)
  • Mr. Yussuf Hamada, Ministry of Finance, Kuwait, (10 min),
  • Mr. Nasser Al Shakily, Ministry of Finance, Sultanate of Oman, (10 min),

Discussion: 25 minutes

16:30 –16:45

Coffee

16:45 – 17:00

Closing Session of the Second Annual Arab Fiscal Forum

17:00 – 18:00

Registration for the Closed Door Session – Joint Session with World Government Summit “Economic Diversification” (By Invitation)

18:00 –19:30

Closed Door Session – Economic Diversification (By Invitation)

The collapse of oil prices has brought economic diversification back to the top of policymakers’ agenda in many oil-exporting countries. These countries need to change their economic model to move from oil-dependent economies to diversified and innovation-based economies. Countries in Asia and Latin America have made major strides in diversifying their economies. This session will bring together policymakers from these regions and international experts to distill lessons that can help guide Arab policymakers in their ongoing efforts to further diversify.

Opening Remarks (4 minutes each):

  • Obaid Humaid Al Tayer, Minister of State for Financial Affairs, United Arab Emirates
  • Christine Lagarde, Managing Director, IMF

Remarks by Moderator (2 minutes): Aasim M. Husain, Deputy Director of the Middle East and Central Asia Department, IMF

Presentations by Invited Speakers (7 minutes each)

  • H.E. Abdul Rahman A. Alhamidy, Director General Chairman of the Board of Directors.
  • Prof. Ha Joon Chang, Professor at Cambridge University, UK.
  • Prof. Jose Antonio Ocampo, Professor at Colombia University, USA

Comments by Lead Speakers (5 minutes each, moderated by Mr. Husain)

HE. Mohammed al-Jadaan, Minister of Finance of Saudi Arabia

HE. Obaid Al Tayer, Minister of State for Financial Affairs of the U.A.E.

HE. Mohamed Boussaid, Minister of Economy and Finance of Morocco

HE. Suma Charkrabarti, President, European Bank for Reconstruction and Development

HE. Amr El-Garhy, Minister of Finance of Egypt

HE. Bandar Hajjar, President, Islamic Development Bank

General discussion: 30 minutes