Tax Potential in North Macedonia

Selected Issues Papers, June 22, 2026

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Tax Potential in North Macedonia

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Bibliographic details

• Authors: Yuan Xiao, Faton Sulejmani, Anamaria Maftei
• Published: June 22, 2026
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229050135.018

Overview and main finding

• The paper assesses North Macedonia’s tax potential and reform options to support fiscal consolidation and create space for rising long-term spending pressures.
• Tax revenue remains the lowest in the region, reflecting low statutory rates, extensive tax expenditures, weak tax efficiency, and a sizable informal economy.
• Using a stochastic frontier model for 154 countries, the paper estimates tax potential at about 21 percent of GDP, implying a tax gap of around 3½ percent of GDP.

Methodology and scope

• Empirical approach: stochastic frontier model applied to 154 countries.
• Coverage: analysis focused on tax potential and reform options for North Macedonia.
• Publication specifics:
  • Pages: 14
  • Volume: 2026
  • Issue: 049
  • Series: Selected Issues Paper No. 2026/049
  • DOI: https://doi.org/10.5089/9798229050135.018
  • Stock No: SIPEA2026049
  • ISBN: 9798229050135
  • ISSN: 2958-7875
• Authorship and date:
  • By Yuan Xiao, Faton Sulejmani, Anamaria Maftei
  • June 22, 2026

Key policy recommendations

• VAT base broadening.
• Rationalized CIT incentives.
• More progressive PIT.
• Higher environmental and health excises.
• Stronger property taxation.
• Improved tax administration.

Subject classifications and keywords

• Subject: Expenditure, Fiscal policy, Revenue administration, Revenue mobilization, Revenue performance assessment, Tax gap, Taxes, Value-added tax
• Keywords: Domestic Revenue Mobilization, Global, IMF country, IMF staff, issues paper, Middle East, North Macedonia, paper estimate, Revenue mobilization, tax expenditure, Tax Gap, Tax Potential, Value-added tax

Source: IMF Selected Issues Papers — "Tax Potential in North Macedonia" by Yuan Xiao, Faton Sulejmani, and Anamaria Maftei (June 22, 2026).

Content in this bundle

• Tax Potential in North Macedonia; IMF Selected Issues Paper No. 2026/049; May 12, 2026
  • Tax Potential in North Macedonia; IMF Selected Issues Paper No. 2026/049; May 12, 2026 (Markdown version)
  • Tax Potential in North Macedonia; IMF Selected Issues Paper No. 2026/049; May 12, 2026 (PDF)