SURINAME-ECONOMY – IDB provides funds to help Suriname strengthen fiscal sustainability, economic growth

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WASHINGTON, Nov 20, The Inter-American Development Bank (IDB) says it has provided US$150 million to help Suriname strengthen its financial sustainability and economic growth.

The Washington-based financial institution said on Friday that the funds would help the Surinamese Government overhaul the tax collection system, boost public spending oversight and efficiency, improve fiscal planning and management, and strengthen the oversight of state-owned enterprises.

The IDB said this is the first operation in a scheduled series of three single-tranche operations, “which will help finance key reforms and strengthen fiscal management.

“The measures financed by the series are technically related but independently financed as scheduled policy-based budget support.”

The bank said the program supports the Government’s plan to improve revenue collection through the adoption of the Value Added Tax and the adoption of regulations to strengthen tax management in all major sectors of the economy.

The IDB added that it would also support the modernization of the revenue agency by establishing a Semi-Autonomous Revenue Agency (SARA) and the preparation of an action plan for reviewing and updating expenditure budget classifications in line with international best practices.

In addition, the IDB said the Government is expected to launch an electronic procurement platform to streamline public spending and have at least eight ministries using this platform to manage their bidding processes by 2025.

It suggested that at least five ministries should adopt guidelines to enhance public infrastructure’s resilience to climate change by 2025.

By the end of the program, the IDB said it is expected that the Government will achieve a reduction of its debt from the current 132 percent of gross domestic product (GDP) to 105 percent in 2025, a stronger economic growth from 1.8 to 3.0 percent, and higher tax revenues coming from indirect taxes (from 8.1 percent to 9.5 percent of GDP).

The IDB said other objectives include helping the Government reduce poverty and promote gender equality.

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