Improving infrastructure: IMF urges extension of taxes, strong oversight and immunity from politics

After assessing that the Western Balkan countries have a huge gap with the European Union in terms of infrastructure, the International Monetary Fund also offers a range of advices.

All these advices stem from an inalienable recommendation that investment spending rates should not be increased since there is no fiscal space.

The IMF says that money should be found through other ways, such as raising the tax base, lifting tax exemptions, and removing incentives, or implementing new taxes such as property taxes.

In order to increase capital expenditures, the current ones should be contained, the IMF says.

Among other things, the institution emphasizes the fact that public investment management should also be improved in order to improve the efficiency of investment in infrastructure as a result.

To achieve this, the IMF recommends: greater co-operation between stakeholders and clarification of responsibilities, preparation and publication of a national investment strategy, evaluation processes for key projects, ongoing government oversight over PPPs and state-owned enterprises, budget transparency by the government, as well as audits conducted periodically.

On the other hand, the IMF advises that priority infrastructure projects must be immunized by politics, which means that political rotation should not undo major infrastructure projects.

Regional co-operation is also a strong point to improve infrastructure IMF estimates.

SCAN

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