SANA’A, Dec. 20 – 2009

Yemen News Agency ( SABA )

Yemen annually loses $ 3.5 billion in wasted tax incomes, more than double the annual revenues from gas exports estimated at about $ 1 billion, officials said on Monday.
Deputy minister of Planning and International Cooperation Mutahar al-Abbasi said in a study titled ‘ taxes …available alternative’ that the tax incomes make up 40 percent of the state expected general incomes, about 15 percent of the Gross Domestic Production.

With the wasted tax incomes, almost 25 percent of the general earnings never reach the state safe.

Based on the facts, al-Abbasi urged the government to expand the tax base to affect individuals, groups and the people with incomes downwardly but not upwardly.

With the proposed move, the government could reduce poverty and income gaps among the Yemeni people, he says, linking its implementation to the regime’s determination to establish a more effective tax system that can ensure justice in the Yemeni society.

The reliance on taxes as main resources for developmental plans comes due to low tax incomes mainly blamed on tax avoidance and poor awareness about taxes, he says.

The government should work on improving the tax system amid the possibility of raising income taxes at the private sector and unused possibilities, and reconsider tax exemptions for a better use of them and the taxes on Qat products, he advised.

According to some studies, the current tax rate represents only 20 percent of the should-be taxes, he said, pointing out that direct and indirect tax rises are not in harmony with the increase in the Gross Domestic Production, an indicator of the possibility of further taxes through these means.

Increasing tax incomes represents an essential element of administrative and financial reforms in the country, and helps tackle corruption through better control of the public funds, he concluded.