International Monetary Fund (IMF) has identified tax initiatives for
different category of countries to help them overcome the global
slow-down in economic growth and manage financial risks.
In
a document titled 'The Managing Director's Global Policy
Agenda-Confront Global Challenges Together', IMF suggests that advanced
economies should calibrate fiscal adjustment and establish credible
fiscal frameworks.
The
Agenda says: "Additional policies include establishing credible
medium-term fiscal consolidation plans (Japan and the United States);
increasing tax revenues and improving compliance; and simplifying the
euro area's complicated fiscal governance frameworks."
It adds:
In advanced economies, energy tax reform can reduce externalities
(e.g., health, traffic congestion, and global warming) and provide space
for growth-enhancing tax reforms. In emerging market and developing
economies (India Venezuela), further reform of energy subsidies would
provide room for essential social and infrastructure spending.
IMF
believes emerging economies need to make more progress on structural
fiscal measures, institutional fiscal frameworks and measures aimed at
broadening the tax base and improving administration.
As
regards the issue of boosting labor supply and tackling inequality in
advanced countries, the Agenda Paper says: "Removing tax disincentives
(Japan, euro area), targeted training programs, and active labor market
policies (euro area) will be essential to maximize labor input's
contribution to growth, address high rates of structural unemployment,
and cope with the challenges of an aging population. Better access to
education and health care, well-targeted social policies, and efforts to
foster financial inclusion can help tackle widening income
disparities."
The
Agenda points out that in several low-income developing countries,
efforts to upgrade infrastructure, improve tax administration,
strengthen monetary and fiscal policy frameworks, foster financial
access, and improve the business environment remained slow and uneven.
Referring
to Arab countries in Transition (ACTs), the Agenda says: "Reforms to
rationalize energy subsidies made progress in ACTs, while efforts to
expand the tax net are proceeding more slowly."
It observes:
"Promoting balanced, sustained growth requires an integrated policy
package that bolsters today's actual and tomorrow's potential output,
diminishes risks, and confronts emerging global challenges."
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