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Thursday, 25 February 2021

Middle-income countries lost 50% of revenues due to coronavirus: Official

The IMF has classified Egypt as a middle-income country

Doaa A.Moneim , Saturday 17 Oct 2020
middle-income countries
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Revenues of middle-income countries have dropped by about 50 percent due to the repercussions of the coronavirus, said Fathuhulla Jameel, the commissioner-general of Taxation at the Maldives Inland Revenue Authority.

Jameel's statement was in response to an Ahram Online question, during a virtual panel on Friday focusing on supporting revenue administrations to operate through the COVID-19 pandemic, on how middle-income countries can cope with decreasing revenues as a result of the pandemic.

The virtual panel is part of the ongoing International Monetary Fund (IMF) and World Bank Group (WBG) annual meetings (autumn meetings).

The IMF has classified Egypt as a middle-income country.

Jameel added that these countries are in dire need for restructuring their expenditures to address such a serious issue and they need to obtain more funds from international financial institutions (IFIs), including the IMF and the WBG, to provide liquidity in light of the decrease in revenues.

Answering the same question, Werner Ovalle, director of customs, superintendence of Tax Administration of Guatemala, said these countries have to craft strategies that aim at providing the necessary tools to collect more taxes to address the challenge.

“Deepening integration with regional countries, supporting exports and imports, and managing disbursements in an effective way are key instruments for these economies to handle low revenues,” said Ovalle.

Andrew Mestres, an official in the fiscal affairs department at the IMF, said that the fundis going to launch a new initiative to deal with the issue.

The attendees urged countries to adopt digital solutions (payments in particular) and automation, and to improve compliance of new policies regarding taxation and customs.

Azael Perez, an official from the fiscal affairs department at the IMF, disclosed that international trade has fell by about 26 percent since the onset of the pandemic and that this has contributed to the decline in countries' revenues. 

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