IMF
Tells ICP It Urges Somalia to
Tax Telecom But Also Provide
It Security
By Matthew
Russell Lee
UNITED NATIONS,
January 26 – When the
International Monetary Fund's
deputy spokesperson William
Murray took questions at the
IMF's biweekly media briefing
on January 26, Inner City
Press asked him about Somalia
and the UN, as well as
Mozambique and Ghana.
Inner City
Press asked:
"The UN's envoy
to Somalia Michael Keating
recently said in New York that
the IMF is urging the
government in Mogadishu to
raise revenue, by means of a
tax on 'ICT' or telecom/mobile
phones. Is that accurate?
Please explain the IMF's
position."
After the
briefing, at which Inner City
Press' Mozambique question was
answered, an IMF spokesperson
provided this on Somalia:
“Somalia has one
of the lowest revenue to GDP
ratios in the world.
Increasing revenue
mobilization, from a low tax
base, is critical to Somalia’s
economic and social
development goals. To that
end, the authorities and IMF
staff reached an understanding
on the need to collect higher
nominal revenues in 2017
compared to those in
2016. The ultimate goal
is to progressively restore,
over time, revenue to GDP to a
level comparable to peer
countries.
In 2017, the authorities plan
to start implementing a more
formal tax system, which is
projected to increase tax
revenues from about 1.4
percent of GDP in 2016 to 2.0
percent of GDP in 2017. A
critical element of these
revenue measures -- based on
current law which the
authorities will start
implementing -- is revenue
from the telecom sector, about
$24.5 million in total in
2017. This is up from the
negotiated tax of $5.0 million
agreed for 2016. The
projection comprises of about
$12–14 million from taxes on
corporate profits and $10–12
million from sales taxes.
Additional revenue collection
from the telecom sector could
be achieved but will require
significant improvements in
revenue administration and tax
collection, while improving
security for telecom
operators.”
During the
January 26 briefing:
"On Mozambique
and its recent default, please
describe the timing of the
IMF's review of a program and
its relation to the ongoing
audit, and its status."
Murray
replied at the briefing that
the IMF remains engaged with
the authorities and if
following the ongoing
independent audit. He
reiterated the IMF's policy
that it will only lend into
arrears if the member is
pursuing "appropriate
policies" and making a good
faith effort with its private
creditors.
On Ghana,
Inner City Press had asked
"given that President Nana
Akufo-Addo has promised to cut
taxes, is the IMF open to
renegotiating the current
program?"
Murray said the program
is expected to continue and
that there will be an IMF
visit at the beginning of
February.
Murray was asked about the new
US administration and noted
that nominee Mnuchin has not
yet been confirmed; he said
the US office in the IMF is
"operating as far as I can
tell."
Tweeted photos here.
He cited
uncertainty in and for Mexico,
given the US and trade policy.
He responded to a question
about the (end of) TPP.
Back on January
17 when the IMF's Tim Calen
took questions about Saudi
Arabia's economy, Inner City
Press asked him:
"What has been
the impact of the Saudi-led
Coalition's Yemen campaign on
the Saudi economy, and what is
the IMF's projection?"
IMF Senior
Communications Officer Wafa
Amr read out the question,
between oil-heavy Reuters and
the Wall Street Journal, and
Callen diplomatically said
that the Saudi budget document
published at the end of 2016
showed military over-spending.
Tweeted
video here.
Callen
said he doesn't have the
information to link that to
the military campaign against
Yemen. But what else would it
be?
On January
12 with IMF spokesman Gerry
Rice held a on- and off-line
press briefing, the first one
in more than a month, Inner
City Press submitted questions
about Yemen, Chad, Sri Lanka,
Mozambique and structural
adjustment, as well as asking
for updates on South Sudan and
Burundi.
Now on
January 13 there is this, on
Yemen, to Inner City Press
from an IMF spokesperson:
"The humanitarian
and economic fallout from
conflict is devastating; the
conflict has weakened
significantly economic
activity, destroyed
infrastructure, and
constricted availability of
basic goods and services. We
continue to work with
international partners and
donors to help assure the
availability of basic food and
to facilitate resuming payment
of civil servants as well as
financial support to the
poorest. The IMF stands
ready to re-engage as soon as
the conflict is resolved to
help restore macro stability,
rebuild institutional
capacity, and jump-start
growth."
It's said
that UN enovy Ismail Ould
Cheikh Ahmed met with Yemen's
Central Bank Governor... in
Saudi Arabia.
The
IMF has, a day later, not yet
answered questions on Chad or
Mozambique. Inner City Press
has asked:
In Mozambique it
has been suggested that the
government could simply not
recognize the guarantees for
the $2 billion “secret” debt
that would be enough to
“reduce the total foreign debt
enough to allow negotiation
with the IMF.” What is the
IMF's response?
“MF-led
structural adjustment reforms
increase protest risks in
Chad” - what is the IMF's
response?
In Sri
Lanka, weeks after the
IMF indicated the country's
foreign reserves were below
comfortable levels the
government now plans to try to
raise $1.5 billion through a
domestic bond sale. Does the
IMF think this is a good move?
On IMF conditions
reducing health care spending,
the Universities of Cambridge,
Oxford and the London School
of Hygiene & Tropical
Medicine “found that for every
additional IMF condition that
is 'binding' - i.e. failure to
implement means automatic loan
suspension - government health
expenditure per capita in the
region is reduced by around
0.25%.” What is the IMF's
response?
Well, what is
it? Rice on January 12
said the IMF's Cyprus resident
representative is at the UN's
Geneva talks, and previewed a
presentation by David Lipton on
"Africa," and a trip there by
Christine Lagarde, including to
the Central African Republic,
locus of French impunity. Watch
this site.
***
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