Not the right time to raise, introduce new taxes in GCC: IMF
Jihad Azour pointed out that infrastructure is also going to be an important growth and recovery driver for the regional economies.
Dubai - Region's system can be improved by being more progressive, building some additional solidarity
It is not the right time to increase taxes on consumption and introduce tax on sectors that will drive the recovery of GCC economies in the post-coronavirus era, a senior official of the International Monetary Fund (IMF) said.
Jihad Azour, the fund's chief economist for the Mena, said the tax system in the region can be improved by being more progressive and building some additional solidarity because income disparity in the region is still getting high. He also called to make the tax system more efficient.
"We still have a lot of special regime exemptions that erode the tax space allowed. It is an opportunity to address that. It is not wise at this stage to increase tax on consumption, especially in countries where the pick-up is slow because this will create additional regression and pressures. Therefore, it is important to look at the fiscal front reforms standpoint," Azour said during a recent webinar.
"It may not be the right time to tax or burden the sectors that could drive the recovery [of the economies]," Azour added.
This is the right opportunity to introduce additional fairness, efficiency and more use of technology to provide more services as well as be more transparent of how public money is being used, he stressed.
Azour pointed out that infrastructure is also going to be an important growth and recovery driver for the regional economies.
"Over the last decade, there is a decline in investment in infrastructure and foreign direct investment in smart technologies... allow technology to thrive and expand," he added.