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Tax Policy in MENA Countries; Looking Back and Forward

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  • Mario Mansour

Abstract

This paper reviews trends in taxation and revenue in MENA countries over 1990-2012, with a focus on non-resource taxes. On average, non-resource revenues declined slightly, while resource revenues soared. Country experiences vary: rates of main taxes and their revenues tend to be higher in the Magreb than in the Mashreq, except for the value-added tax, where lower rates are associated with equal or higher revenue; most oil producers raise little tax revenues—generally less than 5 percent of GDP—and most have reduced them since the late 1990s. But there are similarities: unlike common experience around the world, income taxes (not indirect taxes) have partially compensated for lost revenue from trade liberalization; revenues from indirect taxes have remained stable; personal income taxes have played an unimportant role as a revenue tool; and fees and stamp duties are significant revenue sources. Looking forward, tax reform challenges will also vary across countries: the Maghreb needs to focus on efficiency-enhancing reforms, especially in capital income and consumption taxes; the Mashreq have some room to increase revenue; and, there are ample opportunities to improve equity and reduce complexity of tax systems in all countries. Finally, the recent decline in oil prices and revenues is a reminder that even resource-rich GCC countries need to lay the basis of a tax system for the future.

Suggested Citation

  • Mario Mansour, 2015. "Tax Policy in MENA Countries; Looking Back and Forward," IMF Working Papers 15/98, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:15/98
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    References listed on IDEAS

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    6. Peter Birch Sørensen, 2005. "Dual Income Taxation: Why and how?," CESifo Working Paper Series 1551, CESifo Group Munich.
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    Cited by:

    1. repec:eee:ecmode:v:76:y:2019:i:c:p:101-116 is not listed on IDEAS
    2. Carolina Bloch & Charlotte Bilo & Imane Helmy & Rafael Guerreiro Osorio & Fábio Veras Soares, 2019. "Fiscal space for child-sensitive social protection in the MENA region," Research Report 36, International Policy Centre for Inclusive Growth.
    3. Mattéo Godin & Romain Houssa & Kelbesa Megersa, 2017. "The Performance of VAT in DGD-partner countries," BeFinD Working Papers 0116, University of Namur, Department of Economics.
    4. Joana Silva & Victoria Levin & Matteo Morgandi, 2013. "Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa," World Bank Publications, The World Bank, number 14064, September.

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