Press briefing of Cabinet Decision taken on 2023-10-30

Tax Policy Reforms to strengthen Revenue-based Fiscal Consolidation

- A number of progressive and broad‑based tax policy proposals have been implemented since June 2022 to achieve revenue-based fiscal consolidation with view to ensuring debt sustainability and as a result of that tax revenue has increased by 51% within the first 9 months in the year 2023 compared to the year 2022. Nevertheless, it has not yet been able to meet the tax collection targets agreed with the International Monetary Fund. Accordingly, the Cabinet granted approval to amend the relevant laws to increase the existing Value Added Tax (VAT) rate up to 18% with effect from 2024‑01‑01 and to implement new tax proposals including the imposition of VAT for certain goods and services to which VAT is not applicable at present, in order to meet tax revenue and primary balance targets as agreed with the International Monetary Fund.