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THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN" DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN"

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THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN" Empty THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN"

Post by claud39 on Tue Jan 14, 2020 8:49 am

THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN"


2020-01-14



THE ARAB MONETARY FUND PUBLISHES THE NINTH ISSUE OF THE "POLICY BRIEF" SERIES ON "THE TAX BURDEN" Logo-ar








The finance ministries in the Arab countries seek to review tax systems in order to achieve more efficient distribution of the tax burden

Some Arab countries resort to reducing the tax burden on foreign companies in order to encourage attracting more foreign capital

Transparent and clear legal frameworks of taxation would enhance the fairness of the tax burden distribution.

The tax burden represents 9.1 percent of GDP in Arab countries, according to Arab Monetary Fund data

Direct taxes contribute about 40% of the total tax revenue at the level of Arab countries as a group according to the Arab Monetary Fund data

In the context of its keenness to develop its research activities, the Arab Monetary Fund launched a research series entitled "Policy Brief", aimed at supporting decision-making in the Arab countries by providing summary research publications that address the most prominent priorities and topics of interest for the Arab member states accompanied by recommendations for policymakers.

The ninth issue of this series touched on the topic of "tax burden", where the summary referred to tax reforms aimed at distributing the tax burden fairly, which would reduce tax evasion rates and increase tax collection and thus maximize tax revenue.

 The summary also touched on the process of transferring the tax burden from the person legally charged to pay the tax to another person. Where he explained that the process of transfer varies from one tax to another, for example with regard to foreign trade taxes or what is known as the customs tariff, the importer loads the tax burden on the price of the imported commodity and thus transmits it to the last consumer. The summary also indicated that bearing the tax burden varies between direct taxes and indirect taxes, depending on the type of market in which the activity is carried out.

In addition, the summary indicated that the tax burden differs from what is known as the tax effort, where the first term refers to the total tax incurred by taxpayers during a specific period of time in relation to the gross domestic product, while the tax effort reflects the total tax actually collected attributed to tax energy Estimated or “optimal tax burden”.

The brief addressed the methodologies used to measure the tax burden such as the Lorenz curve to distribute the tax burden, as well as the Laffer curve , or what is known as the tax pressure methodology. He also reviewed the summary number of international attempts to measure the burden of tax , including " the burden index tax" Heritage Foundation  (Heritage Foundation) ,  which the institution Tansabh in the context of the issue of economic freedom index , which is a weighted average of three sub - indicators is the income tax rate on individuals, the rate Corporate income tax, in addition to the total burden of direct and indirect taxes as a percentage of GDP. There is an inverse relationship between the value of the indicator and the tax burden. 

The lower the value of the indicator, this indicates the large size of the tax burden [size=8][1].. The aim of using this indicator lies as one of the indicators used to identify the economic freedom of individuals and companies [2] . It also reviewed the summary of other indicators used to measure the burden of tax, such as legal tax (rate Statutory Tax Rates The most common) , particularly with regard to Bmfadilh tax burdens between countries in order to make investment decisions.[/size]

The summary touched on some international and Arab experiences in distributing the tax burden, as he indicated that some Arab countries have resorted to reducing the tax burden on foreign companies in order to encourage attracting more foreign capital. Where it was found that there is an improvement in the distribution of the tax burden efficiency in the Arab countries according to the latest data, to reflect the impact of the financial reforms recently adopted. 

In this context, the relative importance of direct taxes on income and profits increased to constitute in 2018 about 40 percent of the total tax revenue at the level of Arab countries as a group compared to only about 27 percent in 2014, while the relative importance of indirect taxes imposed on Sales of goods and services without distinguishing between the taxpayers according to the income level, as their percentage decreased to constitute 60% of the total tax revenue structure in 2018 compared to 73% in 2014.

The summary concluded with a set of recommendations in the area of ​​tax reform policies, where it was indicated in this regard that economic policy makers are keen to strengthen measures to expand the tax base, which leads to an increase in available tax revenues and thus financing infrastructure projects and support social safety net programs. They are also keen to put in place a flexible tax system through which an acceptable and effective tax burden can be imposed to ensure compliance by taxpayers with no tax evasion. 

In addition to their eagerness to put in place a flexible tax system, it is possible to impose an acceptable and effective tax burden to ensure compliance by taxpayers with no tax evasion. This requires consideration of three main determinants: the consistency of the tax burden with the goals of sustainable development, the assessment of the tax burden periodically, and the tax burden design characterized by efficiency, equality, transparency, and periodic review.
 

 

The full version of the issue is available at the following link:


 



[1]  The tax burden index, which refers to what is known as financial freedom, is calculated according to the Heritage Foundation through the square cost function, which reflects the possibility of decreasing tax revenues with increasing tax rates.


[2] Index of Economic Freedom (2019), Promoting Economic Opportunity, Individual Empowerment & Prosperity. https://www.heritage.org/index/fiscal-freedom .










https://www.amf.org.ae/ar/content/%D8%B5%D9%86%D9%80%D9%80%D9%80%D9%80%D8%AF%D9%88%D9%82-%D8%A7%D9%84%D9%86%D9%82%D8%AF-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A-%D9%8A%D8%B5%D9%80%D9%80%D9%80%D9%80%D8%AF%D8%B1-%D8%A7%D9%84%D8%B9%D8%AF%D8%AF-%D8%A7%D9%84%D8%AA%D8%A7%D8%B3%D8%B9-%D9%85%D9%86-%D8%B3%D9%84%D8%B3%D9%84%D8%A9-%D9%85%D9%88%D8%AC%D8%B2-%D8%B3%D9%8A%D8%A7%D8%B3%D8%A7%D8%AA-%D8%AD%D9%88%D9%84-%D8%A7%D9%84%D8%B9%D8%A8%D8%A1-%D8%A7%D9%84%D8%B6%D8%B1%D9%8A%D8%A8%D9%8A
claud39
claud39
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