Economic and Fiscal Update

Enhancing Revenues and Optimizing Expenditures The government has undertaken concrete measures to increase tax revenues and rationalize expenditures Custom Taxes Reform Stronger IT capacity to improve customs tax collection and follow-up Investment in technology to rigorously control quantities of wood exported End of discretionary customs tax exemptions and rigorous follow-up of existing exemptions Rationalization of Current Expenditures ■ Containment of public wages, recruitment freeze and launch of a voluntary retirement program ■ General audit of the main public institutions with a focus on payroll ■ Review and consolidation of all autonomous government agencies TAX REFORM CAREFUL SPENDING VAT & Revenue Taxes Reform End of discretionary VAT exemptions Setup of a transparent and efficient mechanism to track VAT refunds Increase in the number and quality of tax audits Limit in tax loopholes Multiplication of recovery actions Rationalization of Capital Expenditures Adoption of a budgeting methodology based upon budget spending targets ■ Strict prioritization of public capital expenditures, with priority given to (i) investment projects already started, and (ii) investments in key enabling infrastructures Sources: Ministry of Economy, Promotion of Investments and Prospective 20

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