Presumptive income taxes in the form of a tax on turnover for SMEs are pervasive as a way to
reduce the costs of compliance and administration. We analyze a model where entrepreneurs
allocate labor to the formal and informal sectors. Formal sector income is subjected either to a
corporate income tax or a tax on turnover, depending on whether their turnover exceeds a
threshold. We characterize the private sector equilibrium for any given configuration of tax
policy parameters (corporate income tax rate, turnover tax rate, and threshold). Given private
behavior, social welfare is optimized. We interpret the first-order conditions for welfare
maximization to identify the key margins and then simulate a calibrated version of the model.
This note discusses administrative measures that can be implemented by customs administrations of low-income and fragile countries in a short period (about a year) to improve traders’ compliance and improve revenue collection. These suggested actions have been identified based on the experience acquired through the International Monetary Fund’s (IMF) Fiscal Affairs Department’s (FAD) technical assistance (TA), particularly the findings and recommendations of TA missions to sub-Saharan African countries.
Strengthening low-capacity customs administrations requires structural reforms to support the effective implementation of defined strategies. Developing core operational functions such as risk management, audit, investigation and intelligence are good examples of such reforms. Modernizing human resource management policies or achieving a fully automated environment in a customs administration are longer-term reform projects. Long-term reforms are not addressed here. The note focuses on targeted actions with a potential to increase trade revenue in the short term, and which can be taken without mobilizing large resources or engaging in a broad reorganization.
It is hoped that the suggestions in this note will help stakeholders, including country authorities, customs management, donors and TA partners, area departments of the IMF, FAD, and the IMF regional TA centers, identify, design, and implement short-term changes in customs administrations. If implemented effectively, these changes should contribute to a noticeable improvement of revenue performance.
This paper discusses Malian mining taxation. Mali’s industrial mining sector is predominantly gold mining, with six industrial mines currently active. Most of the mines are old, but some have substantial reserves; extensions are planned for the Syama, Morila, Kalama, Tabakoto-Segela, and Loulo-Gounkoto mines. The Fiscal Analysis for Resource Industries model was completed for five new projects with recent feasibility studies. The government revenue contributed by the five new projects is on the order of US$1.7 billion (constant dollars) over the next 10 years. The application of the 1999 or 2012 Mining Code increases the government’s share of income in comparison with the 1991 code.
The staff report for the Second Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility highlights the Islamic Republic of Mauritania’s economic and financial policies. The basic non-oil fiscal balance was significantly higher than projected, owing mainly to high fiscal revenues and delays in investment spending. Monetary policy remained prudent, contributing to a further decline in inflation. In view of its limited oil revenue prospects, Mauritania needs to continue mobilizing concessional support to finance its poverty reduction strategy.
The staff report for the First Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility (PRGF) for the Islamic Republic of Mauritania explains the macroeconomic outlook and fiscal policy. Despite a substantial oil revenue shortfall, the fiscal deficit target was met and significant reserves were maintained in the oil fund. The prudent monetary stance contributed to strengthening confidence in the ouguiya and reining in inflation. Mauritania needs to continue to mobilize concessional support to finance its poverty reduction strategy.
This Joint Staff Advisory Note provides World Bank and IMF staff analysis, and advices on key priorities to be strengthened during the implementation of the second Poverty Reduction Strategy Paper (PRSP-2) in Mauritania. The PRSP-2 conveys an ambitious poverty reduction strategy based on a set of sound macroeconomic, structural, and sectoral policies to be implemented by 2015. The achievement of the PRSP-2 objectives will be difficult and will require a better prioritization in the context of absorptive capacity constraints and increasing and highly volatile public resources.
Mauritania achieved substantial progress owing to its macroeconomic policies, budget formulation, governance, and transparency under the economic program. Executive Directors commended the program and emphasized the need for tight fiscal and monetary policies. Directors noted the implementation of all remedial actions and agreed that Mauritania qualifies for debt relief under the Multilateral Debt Relief Initiative (MDRI). They also called on the authorities to strengthen the financial sector regulatory framework, and commended the comprehensive Anti-Money Laundering and Combating the Financing of Terrorism framework.
The report provides the details of the projections and estimates of Mauritania's gross domestic product by activity at current prices, 1992–2005 and at 1998 prices, 1993–2005; iron ore production, exports and stocks, consolidated government operations and revenue, 1994–2005; consumption of petroleum products, 1995–2005; monetary survey, foreign assets and liabilities of the banking system, assets and liabilities of the central bank and commercial banks, exports and imports, external publicly guaranteed debt outstanding and debt services, income and transfers, foreign trade indices, SNIM operating accounts and balance sheet, supply of cereals, etc.
The Mauritanian transition authorities embarked on a path toward democracy, rule of law, and good governance. The transition authorities initiated a wide range of structural reforms based on the priorities that emerged from consultations with civil society and political parties, and emphasizing the need to improve transparency and governance. The discussions on fiscal and monetary policies and on structural reforms aimed at consolidating recent progress toward macroeconomic stabilization, good governance, and transparency. Mauritania will benefit from considerable technical assistance (TA) from the IMF.