Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia
Departmental Papers, July 6, 2022
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- Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia
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Bibliographic details
- Authors: Brett Rayner, Priscilla S Muthoora, Charles Vellutini, Ling Zhu, Vincent de Paul Koukpaizan, Alireza Marahel, Mahmoud Harb, Imen Benmohamed, Shafik Hebous, Andrew Okello, Nathalie Reyes, Thomas Benninger, Bernard Sanya
- Published: July 6, 2022
- Series: Departmental Papers
Executive summary and context
- Domestic revenue mobilization has been a longstanding challenge for countries in the Middle East and Central Asia.
- Insufficient revenue has constrained priority social and infrastructure spending, reducing countries’ ability to:
- reach the Sustainable Development Goals,
- improve growth prospects,
- address climate related challenges.
- Revenue shortfalls have often been compensated by large and sustained debt accumulation, raising vulnerabilities and limiting fiscal space to address future shocks.
- The COVID-19 pandemic and the war in Ukraine have compounded challenges to sustainable public finances and exacerbated societal inequalities, underscoring the need to raise revenues efficiently and equitably.
- The paper examines the scope for additional tax revenue mobilization and policies to gradually raise tax revenue while supporting resilient growth and inclusion.
Main findings
- Excluding hydrocarbon revenues, the region’s average tax intake lags those of other regions.
- Fragile and conflict-affected states (FCS) in the region 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 is an important factor driving tax revenue shortfalls:
- notably low tax rates and pervasive tax exemptions.
- Weak tax compliance also plays a role, reflecting both structural features and challenges in revenue administration.
- Personal income tax systems in the region vary in:
- their progressivity—the extent to which the average tax rate increases with income,
- their ability to redistribute income.
Policy priorities and recommendations
- Improve tax policy design to broaden the tax base and increase progressivity and redistributive capacity.
- Strengthen revenue administration to improve compliance.
- Implement structural reforms to incentivize tax compliance, formalization, and economic diversification.
- Pursue revenue mobilization measures that support resilient growth and inclusion, balancing efficiency and equity.
Publication and metadata
- Authors: Brett Rayner, Priscilla S Muthoora, Charles Vellutini, Ling Zhu, Vincent de Paul Koukpaizan, Alireza Marahel, Mahmoud Harb, Imen Benmohamed, Shafik Hebous, Andrew Okello, Nathalie Reyes, Thomas Benninger, Bernard Sanya
- Date: July 6, 2022
- Series: Departmental Paper No 2022/013
- Issue: 013
- Volume: 2022
- Pages: 65
- ISBN: 9798400203411
- ISSN: 2616-5333
- Subject keywords: Corporate income tax, International organization, Personal income tax, Political economy, Revenue administration, Tax administration core functions, Tax return filing compliance, Taxes
- Geographic/ topical keywords: Central Asia and the Caucasus, Global, Middle East, Middle East and Central Asia, revenue challenge, revenue gaps, revenue mobilization, tax policy, tax ratio, tax revenue gap, tax revenue shortfall
Source: "Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia", Departmental Papers 2022, 013 (July 6, 2022).
Content in this bundle
- Executive Summary