Raise the GST rate on petroleum products from 17 to 27 percent, introduce additional fiscal measures, including 0.1 percent of GDP reduction in electricity subsidies, with total yield of 0.35 percent of GDP to assure compliance with the year-end fiscal targets.
The authorities implemented a fiscal adjustment package with a total yield of 0.45 percent of GDP. Administrative difficulties delayed the subsidy reduction component and the authorities substituted revenues from the bonus shares tax, whose court challenge has been resolved. This, together with the higher GST on oil and fuels, and other small tax measures, completed the package, which yields more than originally envisaged. In staff’s view, the authorities’ actions accomplish the objective of the prior action, and are sufficient to support staff’s recommendation for the completion of the review.