Nicosia, June 5 (ANI): Syria's Minister of Finance Muhammad al-Husain has recently announced that the Syrian government will introduce VAT as from next year with a flat rate of 10 per cent. 

Hussein assured the people that VAT would not be imposed on foodstuffs.

The Syrian government, which is facing a budget deficit of 4,2 billion dollars in 2008, has been trying to find new sources of income revenue, as oil income has fallen from 70 per cent of budget income a few years ago, to just 20 per cent of government revenues.

Hussein said that the introduction of VAT was part of Damascus' plan to reform the taxation system.

In 2003, top tax rate was brought down from 63 per cent to 28 per cent. The government also lowered customs fees.

The Finance Minister said that Syria had entered an era of oil deficit, as 55 per cent of its needs in petroleum products are imported.

The International Monetary Fund in its annual report described VAT as one of the two main pillars of Syria's fiscal adjustment.

The IMF pointed out that VAT would have a strong revenue raising potential, with only a limited impact on production and investment. (ANI)

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