The International Monetary Fund has released its Article IV consultation with Suriname highlighting the importance of implementing a fully-fledged value-added tax regime to lock in progress made on the fiscal and economic fronts in recent years.
The IMF pointed out that Suriname’s macroeconomic performance has strengthened markedly over the past decade, and growth in the nation’s gross domestic product (GDP) is keeping pace with the region’s fastest growing economies.
That being said, the IMF highlighted that despite significant progress on fiscal consolidation in recent years, the nation’s fiscal deficit drifted in 2012 to 5 percent of GDP from 4 percent in 2012, mainly due to higher public spending. The Government hopes to bring the deficit down to as low as 3 percent in 2013.
In providing recommendations, the executive board of the IMF welcomed Suriname’s strong growth supported by sound fiscal policies. It noted however that the country’s heavy reliance on commodity exports had exposed fiscal and external vulnerabilities. The board stressed the importance of structural reform to promote fiscal sustainability and enhance competitiveness.
A key part of this effort should involve the long-awaited transition to a value-added tax regime, the IMF underscored. Expected to be introduced from January 1, 2014, the value-added tax would replace the current tax on turnover, and zero rate basic foodstuffs.