Damascus For many years, the Syrians suffered from the tax system that prevailed in the era of the regime Bashar al -Assad The ousted, as it was designed – according to the vision of many experts – to protect the interests of the great merchants and the capital of the correspondence that dominated the country; The regime thus exempted the owners of the wealth associated with power from accountability, while the young merchants and industrialists were exhausted with taxes imposed without clear criteria, which led to the migration of thousands of industrialists and merchants from the country.
In the context of dealing with this heavy legacy, the Tax Reform Committee, headed by Syrian Finance Minister Mohamed Youser Burniyah, held its first meeting since the announcement of its formation early this month.
After the meeting, the minister assured the media that the current tax system is “not in sustainable, because it does not serve the economic vision of the country, nor the interests of the private sector, nor the concept of justice, as well as its inability to support the wheel of industry in the country.”
He explained that the committee agreed on the basic axes of tax reform, which includes reducing tax segments, simplifying procedures, and unifying taxes.
Partnership with the private sector
Burniyah pointed out that the state is keen to “be an active partner for the private sector, and not just a collection authority,” stressing that the ongoing tax reforms will take its time to crystallize in a proper and balanced manner, ensuring its suitability for all parties in the long run, and not for a limited period that extends for only two or three.
The minister stressed the need to avoid urgency or jumping on the stages, calling for a gradual approach to building a modern tax system that serves an interest. Syria It supports the wheel of industry, while seeking to provide a clear and transparent system that gives the investor full confidence that he will serve his interests.
He also indicated that a number of fees have already been canceled, and there is a tendency to cancel more taxes, while working to unify the tax system and move to less and more uniform taxes.
At the end of his statements, Bernia stressed that Syria is moving towards becoming “one of the most competitive countries in terms of the modern tax system.”
Activating industries
Regarding the ongoing tax reforms, the economist Adham Qadatati believes that it is based on studies aimed at revitalizing local industries in which Syria has long experience, such as the textile industry, as well as stimulating new and promising industries such as technology, which the country still lacks sufficient infrastructure.
Qudatati links the success of the tax system amending the government’s vision and strategic plans, whether in the medium term (5 years) or long (10 years). And it confirms that the reduction of taxes or fees must be done according to 3 main criteria:
- The size of local production, time periods (seasons).
- The general situation of the economy, including the size of the expected investments and the needs of the local market of internal manufacturing products.
The expert notes that the closer the country is to achieve self -sufficiency from a specific product, then the taxes can be gradually raised, and vice versa.
He explains that Syria, at the present time, needs to import, which requires low taxes and fees, stressing the need to adjust the values of those taxes periodically based on regular reviews of the economic reality.
It sets an example of agricultural taxes, which must change depending on the seasons and crops, stressing that the tax system is a thorny file that is related to the directly changing conditions.
Promote partnership
With regard to the expected impact of these reforms on the investment environment and the private sector in Syria, Qudati indicates the need to strengthen the partnership between the public and private sectors, due to the many benefits that it may achieve, the most prominent of which is the reduction of waste in the public sector, and the provision of an effective administrative model through the private sector.
And it stresses the need to preserve the role of the regulatory state, especially with regard to prices and providing basic products in the market, stressing that this partnership enables the state to get out of the traditional role of “collection” and protect the public sector from the loss as it was during the era of the ousted regime.
Qaimati believes that the application of this partnership in the future may take place through the establishment of holding companies run by the private sector with a symbolic contribution from the state, in exchange for granting facilities and proportions of profits.
Regarding the need to increase government revenues and reduce the tax burden on the citizen at the same time, the expert believes that achieving this equation requires the availability of several criteria, foremost of which is the “end of the culture of bribery and patronage”.
And he confirms that if the economy is “controlled”, the state will not face a budget deficit, especially since Syria is a country rich in esoteric wealth that would reduce the financial burden, along with partnerships with other countries to pass gas and oil lines and benefit from their revenues.
Qaimati concludes that the government is required to increase its revenues in a deliberate manner outside the framework of what is known as tax revenues or traditional fees.