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Middle East and Central Asia > Mauritania, Islamic Republic of

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Cover IMF Staff Country Reports
Islamic Republic of Mauritania: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
The paper examines domestic revenue mobilization in Mauritania and proposes strategies to enhance tax revenue collection to address fiscal sustainability challenges and finance critical investment projects. Despite recent progress, Mauritania’s tax-to-GDP ratio remains below that of its peers, constrained by a complex legal framework, numerous derogatory tax regimes, and inefficiencies in revenue administration. The analysis indicates that Mauritania could increase tax revenues by up to 3.4% of GDP in the medium term, thus reducing its tax gap by one-third. Key policy recommendations include reducing VAT exemptions, replacing corporate tax exemptions with cost-based incentives, reforming the personal income tax system, broadening the consumption tax base, simplifying tax procedures, managing tax arrears more effectively, and strengthening tax compliance.
Keywords:
tax Potential; tax Effort in Mauritania; VAT revenue; revenue component; rates in Mauritania; Value-added tax; Corporate income tax; Tax administration core functions; Consumption taxes; Global
Cover High-Level Summary Technical Assistance Reports
High-Level Summary Technical Assistance Report: Mauritania: Tax Policy Diagnostic
Grégoire Rota-Graziosi
,
Thomas Benninger
,
Jean-François Brun
,
Emilie Caldeira
, and
Fayçal Sawadogo
The IMF’s Fiscal Affairs Department has been working with Mauritania on capacity building in tax policy. Mauritania has recently created a tax policy unit and adopted a new General Tax Code in 2019 with a corporate income tax and a semi-dual approach to personal income taxation. However, there is significant scope to enhance the efficiency and effectiveness of income taxes, including due to the proliferation of wasteful tax exemptions. The fast urbanization also calls for a review of recurrent property taxation. The formalization of property rights requires a temporary suspension of the excessive registration fees. Consumption taxation can also be improved by broadening the tax base, for example, by abolishing regressive value-added tax exemptions or by imposing excise taxes on imported used vehicles. Finally, several recommendations aim to support the reform of the Mining Code, such as introducing some progressivity, prohibiting the negotiation of any tax parameters, and strengthening the principle of ring-fencing.
Keywords:
direct taxation; indirect taxation; CIT; VAT; property tax; mining taxation; tax credits; tax policy diagnostic; consumption taxation; IMF's Fiscal Affairs Department; regressive value-added tax exemption; mining tax regime; Income and capital gains taxes; Corporate income tax; Global
Cover IMF Working Papers
Informality, Labor Market Dynamics, and Business Cycles in North Africa
Olivier Bizimana
and
Shant Arzoumanian
Employment informality is widespread across North Africa. This paper aims to shed light on the role played by the informal sector in labor market adjustments over the business cycle. It finds that the response of labor markets to output fluctuations is more muted in countries with higher informality levels, like the North African economies. The analysis also confirms that informal employment is countercyclical and acts as a buffer during economic downturns in countries with relatively higher informality. However, contrary to what took place in past recessions, informal employment contracted sharply during the 2020 pandemic recession in high informality economies, suggesting that it did not play its traditional countercyclical role. By contrast, employment informality tends to fall modestly or increase during economic upturns, including the post-pandemic recovery. This finding presages the persistence of a large informal sector in the post-covid era in medium- and high-informality countries.
Keywords:
Informality; Labor Markets; Business cycles; Okun’s Law; employment informality; labor market dynamics; business cycles in North Africa; informality economy; law coefficients from panel regression; product market rigidity; Informal employment; Employment; Economic recession; Labor force participation; North Africa
Cover IMF Working Papers
Personal Income Taxes in the Middle East and North Africa: Prospects and Possibilities
Mario Mansour
and
Eric M. Zolt
Personal income taxes (PITs) play little or no role in the Middle East and North Africa, often yielding less than 2 percent of GDP in revenue—with the exception of few North African countries. This paper examines how PITs have evolved in recent decades, and what they might look like in the next 20 years. Top marginal tax rates on labor and business income of individuals have declined substantially, a trend that mirrors reductions in advanced and developing economies. Taxation of passive capital income has changed very little, and the revenue intake from this source remains low throughout the region (less than 1 percent of GDP on average and concentrated in oil-importing non-fragile states). Social security contributions (SSC) have increased in importance in nearly all MENA countries, and some countries have introduced additional payroll taxes. The combination of reduced marginal tax rates, light taxation of income from capital and business activities, and increase of SSC, have resulted in income tax systems that create disincentives to work and incentives for informality, and contribute little to government revenue and income redistribution. Given differences in economic and political structures, demographics, and starting points, the path to PIT/SSC reforms will vary across the region. Countries with relatively mature PIT/SSC systems, where revenue performance has improved in the past two decades, will increasingly need to balance the revenue and equity objectives against effciency objectives (in particular labor market incentives and infromality). Countries with no PITs will have to weigh whether a consumption tax/SSC system that mimic a flat tax on labor income is sufficient to diversify revenue away from oil and whether to adopt PITs to address rising income and wealth inequality. Finally, fragile states, who face more political volatility and weaker fiscal institutions, will have to focus on simplicity of tax design and collection to be able to raise revenue from PITs.
Keywords:
Personal income taxes; social security contributions; payroll taxes; fragile and conflict states; Middle East and North Africa; Gulf-Cooperation Council; SSC reform; SSC system; revenue performance; PIT objective; PIT revenue; Personal income tax; Income tax systems; Income; Income and capital gains taxes; Corporate income tax; North Africa; Middle East; East Africa; Global
Cover IMF Working Papers
The Optimal Turnover Threshold and Tax Rate for SMEs
Feng Wei
and
Jean-François Wen
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.
Keywords:
WP; tax rate; income tax; production function; Turnover Tax; Threshold; Corporate Income Tax; Tax Compliance; Informality; tax regimes firms choose; turnover tax rate; middle cost firm; profit-difference curve; presumptive regime; Sales tax; Presumptive tax; Compliance costs; Sub-Saharan Africa; Global
Cover IMF Staff Country Reports
Islamic Republic of Mauritania: Economic Development Documents
International Monetary Fund. Middle East and Central Asia Dept.
This Economic Development Document summarizes Mauritania’s Strategy for Accelerated Growth and Shared Prosperity (SCAPP) for 2016–30. The first five-year phase of the SCAPP will complete projects underway and lay the foundation for a new, politically more peaceful Mauritania, with infrastructure to support growth and encourage development of the country’s natural resources. Steps will be taken to complete the reforms needed to improve the business climate and promote the private sector. In the second five-year period, the economy will be more diversified and competitive, with the real rate of growth averaging about 10 percent a year. The third five-year phase will consolidate Mauritania’s “new look,” and economic growth will exceed 12 percent a year.
Keywords:
ISCR; CR; border
Cover IMF Staff Country Reports
Islamic Republic of Mauritania: Economic Development Documents
International Monetary Fund. Middle East and Central Asia Dept.
This Economic Development Document summarizes Mauritania’s Strategy for Accelerated Growth and Shared Prosperity (SCAPP) for 2016–30. The first five-year phase of the SCAPP will complete projects under way and lay the foundations for a new, politically more peaceful Mauritania, with infrastructure put in place to support growth and encourage development of the country's natural resources. Steps will be taken to complete the reforms needed to improve the business climate and promote the private sector. In the second five-year period, the economy will be more diversified and competitive, with the real rate of growth averaging at about 10 percent a year. The third five-year phase will consolidate Mauritania's “new look” and the economic growth will exceed 12 percent a year.
Keywords:
ISCR; CR; border; private sector development strategy; public finance; Islamic Republic of Mauritania honor; natural resources; poverty rate; shared prosperity; Inclusive growth; Public investment and public-private partnerships (PPP); Human capital; Business environment; Global
Cover IMF Working Papers
Gender Equality and Economic Diversification
Romina Kazandjian
,
Ms. Lisa L Kolovich
,
Ms. Kalpana Kochhar
, and
Ms. Monique Newiak
We show that gender inequality decreases the variety of goods countries produce and export, in particular in low-income and developing countries. We argue that this happens through at least two channels: first, gender gaps in opportunity, such as lower educational enrollment rates for girls than for boys, harm diversification by constraining the potential pool of human capital available in an economy. Second, gender gaps in the labor market impede the development of new ideas by decreasing the efficiency of the labor force. Our empirical estimates support these hypotheses, providing evidence that gender-friendly policies could help countries diversify their economies.
Keywords:
WP; output diversification; Gender inequality; female labor force participation; economic diversification; economic growth; human capital; low-income and developing countries; export diversification; export product diversification; Theil index; globalization Index; Export diversification; Gender diversity; Women
Cover IMF Staff Country Reports
Union économique et monétaire ouest-africaine (UEMOA): Questions générales
International Monetary Fund. African Dept.
Union économique et monétaire ouest-africaine : questions générales
Keywords:
ISCR; CR; Waemu; investment efficiency; investment; WAEMU country
Cover IMF Staff Country Reports
West African Economic and Monetary Union (WAEMU): Selected Issues
International Monetary Fund. African Dept.
This paper presents stylized facts on the quantitative and qualitative infrastructure gap in the West African Economic and Monetary Union (WAEMU), estimates the efficiency of public investment, and recommends how to improve it. The WAEMU countries face an important common challenge of creating sufficient fiscal space to finance ambitious growth, development, and poverty-reduction programs in individual countries. This paper also provides comparative evidence of the situation of WAEMU in several areas of financial development relative to groups of benchmark countries. The state of inclusion in the WAEMU along three dimensions—poverty, income inequality, and gender inequality—is also examined in this paper.
Keywords:
ISCR; CR; Waemu; investment efficiency; investment; WAEMU country; WAEMU member; extent income; WAEMU growth; Public investment spending; Public investment and public-private partnerships (PPP); Financial sector development; Gender inequality; Sub-Saharan Africa; West Africa; Global