IMF urges tax plans for EU deals with poor states

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DAKAR, Nov 3 (Reuters): New trade deals being negotiated between EU countries and former colonies must be accompanied by detailed plans to replace lost revenues when poor countries cut tariffs on imports from Europe, an IMF official said Friday.
The European Union hopes to sign economic partnership agreements (EPAs) with nearly 80 ex-colonies before a World Trade Organisation (WTO) waiver on its preferential trade terms expires on December 31.
The deals will incorporate regional trade agreements, which under WTO rules must lead to the elimination of tariffs on at least 80 per cent of imports from Europe-a crucial source of income for many African, Caribbean and Pacific (ACP) countries.
"What is important, whatever is agreed, is that it is accompanied by a well detailed plan for how to make up for revenue losses," Benedicte Vibe Christensen, deputy director of the International Monetary Fund's Africa Department, told the news agency in an interview in Senegal.
"Traditionally African countries have relied on trade taxes because they are the easiest to collect, and therefore it requires long advanced planning to ensure that revenues are in place to make up for any potential reduced revenue," she said.