Republic of Congo: Selected Issues
IMF Staff Country Reports, January 27, 2020
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- Republic of Congo: Selected Issues
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Bibliographic details
- Published: January 27, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513528052.002
Summary
- The paper discusses reforms to generate higher revenues from the non-oil sector through measures to:
- rationalize the tax code,
- broaden the tax base, and
- increase administrative efficiency.
- Reforms should be complemented by economic diversification policies that support non-oil growth and thereby expand the potential tax base.
- The paper reflects on lessons learned from other country experiences relevant for the Republic of Congo.
- The authorities should step up revenue mobilization as a key component of their medium-term fiscal strategy.
Key policy recommendations and reform priorities
- Strengthen tax policy coordination and strategy:
- The newly created Tax Policy Unit in the Ministry of Finance should reduce institutional fragmentation and facilitate the design, coordination and implementation of a medium-term revenue strategy.
- Address tax base erosion:
- Urgently tackle erosion of the tax base generated by an excessive and discretionary use of tax exemptions that do not comply with existing laws and regulations.
- Improve tax administration and compliance:
- Continue to focus on rationalizing the tax code and increasing administrative efficiency to recover tax arrears, including through the modernization of existing income tax systems.
- Complement fiscal measures with broader economic policy:
- Implement economic diversification policies to support non-oil growth and expand the potential tax base.
Findings and analytical emphasis
- Revenue mobilization from the non-oil sector is feasible through a package of tax code rationalization, base broadening, and administrative improvements.
- Administrative modernization is important for recovering tax arrears and improving compliance.
- Excessive and discretionary tax exemptions are identified as a key driver of tax base erosion and require urgent corrective action.
- Institutional fragmentation impedes coherent medium-term revenue strategy design and implementation.
Subject coverage and keywords
- Subject: Consumption, Fiscal policy, Fuel prices, Import prices, National accounts, Price structures, Prices, Revenue mobilization
- Keywords: Africa, Congolese authorities, Consumption, CORAF, CR, diversification plan, Fuel prices, governance, governance reform, government, government website, Import prices, ISCR, price, Price structures, refinery price, retail price, Revenue mobilization, Sub-Saharan Africa, tax arrears
Content in this bundle
- Republic of Congo: Selected Issues; IMF Country Report No. 20/27; January 3, 2020