Diversification efforts include raising more revenues from taxes as well as reducing money spent on fuel subsidies. Image Credit: Pixabay

Dubai: The Arab Monetary Fund (AMF) called on Sunday for further economic reforms in the Arab world, including cutting energy subsidies and boosting tax revenues.

Abdul Rahman Al Hamidy, director general of the Arab Monetary Fund, stressed the importance of economic diversification, saying it was among the most important reforms being implemented by Arab governments.

Diversification efforts include raising more revenues from taxes as well as reducing money spent on fuel subsidies. Al Hamidy said that in 2018, Arab countries spent $240 billion on energy subsidies — the equivalent of 8 per cent of the Gross Domestic Products (GDP) of Arab countries.

“Despite efforts to develop tax systems in Arab countries, the levels of tax collection still require more efforts and reform to reach those of emerging markets and other developing economies,” he said in a speech at the Arab Regional Tax Forum in Dubai.

Al Hamidy said that tax revenues accounted for 13 per cent of Arab countries’ non-oil GDP in 2017, compared to 17 per cent in developing economies.

He added that Arab countries have been seeing a significant increase in budget deficit levels since 2014, making financial discipline and sustainability one of the key challenges currently facing economies in the Arab world.