With funding from the Bill & Melinda Gates Foundation, the International Monetary Fund (IMF) released its latest book, entitled, “Digital Revolutions in Public Finance,” at a launch event in Washington, DC on 7 November. The book, edited by Sanjeev Gupta, Michael Keen, Alpa Shah and Geneviève Verdier, captures the research originally presented at the Digital Revolutions in Public Finance Forum held during the IMF-World Bank Spring Meetings in April 2017, and focuses on the opportunities offered by digital transformation and the issues which must be confronted in implementing such initiatives in both developed and developing countries. Continue reading “Digital Revolutions in Public Finance: A New Book by the IMF”
On 10 May, the IMF released its Sub-Saharan Africa economic outlook, Restarting the Growth Engine. The report is available (in English and French) on the IMF’s website.
The report features a comprehensive examination of the informal sector in Sub-Saharan Africa, with the IMF estimating that the informal sector contributes 25%-65% of GDP and 30%-90% of nonagricultural employment. From a domestic revenue mobilization perspective, this significant portion of Sub-Saharan African economies represents potential budget revenues. Institutional challenges remain, however, when it comes to encouraging the conversion of the informal sector into the formal sector. A large tax burden and overly cumbersome compliance requirements are likely to have the paradoxical effect of encouraging economic activity to remain in the informal sector. The transformation of digital technologies and services in many Sub-Saharan Africa economies presents opportunities for converting the informal sector, while not creating onerous tax or administrative compliance burdens.
These topics will be further explored as technical sessions in ITIC’s Africa Tax Dialogue later this year, including examination of successful country case studies.
Dan Witt is President of the International Tax and Investment Center (ITIC).
The mood at last weekend’s IMF and World Bank Spring Meetings was the most optimistic since the global financial crisis of 2008-2009, as evidenced by the communiqué issued by the IMF’s Governing Board: “The global economic recovery is gaining momentum, commodity prices have firmed up, and deflation risks are receding.” Nevertheless, there are concerns that political and policy uncertainties (often citing the U.S. and EU) pose risks to improving growth. Concerns were also expressed by government officials, IMF senior representatives and civil society groups about “those who have been left behind” and have not benefited from global economic integration and technological progress.
The IMF’s Fiscal Monitor April 2016 (“Acting Now, Acting Together”) looks at fiscal policies for innovation and growth. Fiscal policy can promote growth in productivity by encouraging innovation.
The global recovery is slowing and fiscal risks are rising. Public debt ratios are being revised upward and the largest revisions are in emerging market and middle income economies. Commodity exporters, including the oil exporters of the Middle East and North Africa, have been hit hard, and advanced economies have high levels of public debt, low inflation and sluggish growth. Continue reading “IMF Considers Fiscal Policies for Innovation and Growth”