Timor-Leste Economic Report, December 2021 : Steadying the Ship
Given the finite nature of petroleum resources and associated sovereign wealth fund, it iscritical for Timor-Leste to build a strong foundation for sustainable revenue mobilization tofinance public spending on development and poverty reduction. Timor-Leste faces the risks ofa fiscal cliff as, under the current spending trajectories, the Petroleum Fund may be fullyexhausted in about ten years. In line with the recent Government’s efforts, there is an opportunity to collect more revenue using value-added and property taxes. The income tax rate is among the lowest in the world while most excise tax rates are insufficient. The authorities may consider to: (i) introduce a value-added tax (VAT); (ii) raise outdated excise tax rates; (iii) increase income tax rates, with a view to promoting greater alignment with regional peers; (iv) improve revenue administration by modernizing the tax system and investing in capacity; and (v) evaluate the potential of a property tax and reporting on tax expenditures (while planning a gradual phasing out).
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| Format: | Report biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021-12-01
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| Subjects: | ECONOMIC GROWTH, ECONOMIC OUTLOOK, REVENUE MOBILIZATION, CORONAVIRUS, COVID-19, FISCAL TRENDS, FUEL PRICE, EXTERNAL BALANCE, TAX COLLECTION, |
| Online Access: | http://documents.worldbank.org/curated/undefined/099852112092112927/P177351079830d04d0a8a00b4a704ea3d12 http://hdl.handle.net/10986/36733 |
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