IMF Staff Country Reports

This Selected Issues paper offers a roadmap for tax policy measures and structural reforms that could be used to raise non-oil revenues. In order to raise revenues in the near-term, the authorities should review the tariff structure to eliminate exemptions and raise tariffs on luxuries. There is scope to make the personal income taxes more progressive and broaden tax bases. Raising non-oil revenues is a key priority because of the expected decline in oil prices, as well as the need to ensure long-term fiscal sustainability and meet sizeable spending needs. Over the medium-term, the authorities should move towards adopting the value added tax and tackle structural obstacles to revenue mobilization—informality, lack of economic diversification, low levels of financial inclusion and high reliance on cash. In parallel, the authorities should significantly accelerate institutional reforms of revenue and customs administration with support of IMF and other donor capacity development efforts.