Tackle tax evasion and diversify the revenue necessary to overcome the crisis 3/1
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    Tackle tax evasion and diversify the revenue necessary to overcome the crisis 3/1

    Tackle tax evasion and diversify the revenue necessary to overcome the crisis

    2/3/2016 0:00

    Baghdad, Hussein al-Tamimi Tgb
    Enable the oil sector and activating investment in the overall production and service sectors is one of the important recommendations of the International Monetary Fund on reducing the effects of lower oil prices on Iraq.

    Christian Josh head of the IMF Mission for Iraq said «morning»: The expand imports requires a focus on oil and non-oil sectors, and to mitigate the impact of low oil prices, should the Iraqi government to take the actions necessary to ensure the achievement of its objectives related to oil production, which requires the implementation of the oil investment which enable it to achieve production targets.

    Increase revenue

    He said the government should increase non-oil revenues, too, can generate additional non-oil revenues through the implementation of reforms along the lines of the package announced by Dr Abadi prime minister in 2015 and include treatment of tax evasion and increase tax collection rates, the implementation of the Customs Act of 2010, as well as therefore, the structure of tariff reforms and support system in sectors such as the energy sector, its role will not only generate revenue, but it also will let the field to improving the services available to the Iraqi people in terms of availability and level.

    In a question about the desired role of the Iraqi government to confront the current crisis of lack of income?

    He said, with a drop in global oil prices and Iraq's continuing fight al «Daash», the increase in oil exports and the implementation of strategies for strong fiscal consolidation are a key factor in 2016 and in the medium term to achieve consistency between spending and available resources.
    And on loans from the International Monetary Fund to Iraq Is the case of a positive for the economy Josh said, there are clear advantages in helping to ease the pressure on public finances provide some funding through this difficult period. In addition, the entering into a funding agreement with the IMF sends a positive signal to the market. And establishing a positive performance and a clear record in the field of economic reforms, which is a prerequisite to enter into a financing agreement with the IMF, Iraq can earn additional sources of funding from other multinational institutions, bilateral donors and international financial markets.

    Financial correction

    He noted that the Fund expects crude oil prices this year in light of the recent developments in the international oil market, the average price in Iraq about $ 30 a barrel in 2016.

    And it demanded to continue the commitment to fiscal correction and economic reform that the government should focus on containing the primary deficit is oil, which is the difference between the non-oil revenue and preliminary expenses of non-oil, noting that in 2015 achieved fiscal adjustment primarily the result of reduced investment in non-oil expenses, but must be also in 2016 and in the medium term modification of current expenditures, such as salaries of government bloated bill (addressing the issue of phantom workers, and the freezing of nominal wages, and other measures), noting that it leads to make room for the increase in non-oil investments that can promote economic growth non-oil sector. The Government should examine public investment projects and prioritized according to the feasibility analysis.

    private sector

    And the negative effects of stopped projects Josh said, working to diversify the economy while giving the private sector a greater role can be a catalyst for job creation fund is advised, and the government should accelerate structural reform to encourage private sector growth and create new jobs, and areas of reform to achieve equal opportunities for banks private and strengthen the financial infrastructure. It also requires reforms to improve the business environment in order to address the difficulties faced by the private sector, noting that Iraq is currently ranked 156 among 189 countries in the comparative report between the countries of the World Bank on Doing Business 2015 compared ranked 151 in 2014 . Iraq occupies a low rank in particular with regard to the start of business procedures, and access to credit, and trading across borders, enforcing contracts, resolving insolvency cases. It is possible to perform address these issues as well as the security situation improves to help the private sector to play a more effective role in the economy.

    Powerful Strategies

    Josh Among the most important reforms that the Iraqi side, the fund is advised to overcome the crisis by adopting a strong implementation strategies for fiscal consolidation in 2016-2017. Despite the contribution of corrective measures to reduce the non-oil primary deficit in 2015, the financial control elements were not perfect. It lost the bulk came from the patch from capital spending rather than current spending items. In the medium term, the authorities should also limit the current expenditures, including payroll bloated, to make way for encouraging increased investment expenditures for non-oil growth. Investing oil is necessary to generate the needed oil revenues to finance most of the public spending items, and therefore should be protected.

    The quality of spending

    He stressed the importance that the government continues to reform public financial management to improve the quality of public spending and raise the efficiency of the implementation of the budget. This involves amendments to the Public Finance Management Act, and move towards the adoption of a single treasury account and implementation of an integrated system of financial management information, and the authorities should improve the supervision of the banking sector to include both private banks and the banks owned by the state. The implementation of the audit on the most important state-owned banks operations (Rafidain and Rasheed) first very important step in this direction, because of the three state-owned banks which Rasheed Bank and the Rafidain Bank of Iraq and the Trade Bank accounts for about 90 percent of banking system assets in Iraq.

    Last edited by Loopback; 03-01-2016 at 09:12 PM.

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