Modernization of taxes mechanism in Yemen [Archives:2002/31/Business & Economy]

YEMEN TIMES STAFF
A working group with the Tax Authority has prepared modernization draft project on modernizing mechanism of tax levying and collection. The aim of this program is to boost tax revenues for supporting the governments budget and finish the incomplete projects. This project will also tackle obstacles encountering businessmen like granting tax exempts stipulated in the new investment promotion law for foreign investors.
Still, this project needs an administratively and technically efficient tax system that would ensure a proper tax collection and exemption as well. Consequently, the project has incorporated many modalities to modernize the activities of the Tax Authority through:
First: Enforcing new laws like the General Tax Law on Sales as well as the Amended Law on Income Tax.
Second: Benefiting from all facilities to ensure a well-functioning tax system.
Third: Generalizing the use of a computerized tax system.
According to recommendations offered by experts & legal departments of the International Monetary Fund its expected that a new formula on income tax law would be reached by the end of this year.
The Tax Authority had last year gained YR. 78,167,000,000 in revenues. These revenues are important for supporting the public budget of the country as it accounts for 11.3 of the national domestic product.
Sources at the Tax Authority say that the Authority has established a special department in charge of providing high quality services to the public. It is also responsible for outlining the Authoritys objectives according to a modern scientific approach.
The vision of the Authority of the five-year plan (2002 – 2005) is geared towards activating the new laws pertinent to general tax on sales and income tax.
The Authority also has a courageous plan to downsize its staff from 3995 to 2500. The Authority aims to increase the number of female at the tax centers at a rate of 20 percent. The Tax Authority aims to also increase the number of the qualified cadre in the field of law, commerce, and economy at a rate of 60 percent.
Main objectives
A document has been presented recently by the Tax Authority to the 1st Reconstruction and Construction Forum where the Tax Authority is entrusted with achieving the following in 15 years:
1- Forming an organizational structure for the administrative authority entitled to privileges employment, deposition and determining wages and bonuses.
2- Accomplishing an increase estimated at 100 percent
Specialists believe that one of the features of imposing taxes on sales are achieving a sense of fairness between national and imported products, exempting the basic services, encouraging investment, fighting tax-evasion, etc.
Since the additional price will be imposed on the prices adding more burden on consumers, specialists are worried that the implementation of the law will lead to more burdens on people who are already suffering. The law created fears among the private sector institutions which thought it would add more taxes.
The government decided to peruse reforms in the taxation sectors and implementation of the sales law which it says will not add more burdens but will rather create a kind of fairness in tax collection.

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