In several countries, these remittances account for more than one fifth of GDP and significantly contribute to domestic consumption and investment. The aim is therefore to improve the conditions for frictionless and efficient money transfers. Rules against money laundering and the financing of terrorism are important, but they should be applied in a way that does not discourage banks from providing correspondent banking services.
Achieving this target requires continued focused action on containing expenditures, increase in tax revenues and reduction in tax exemptions. Revenue augmentation would critically depend upon improvement in tax/GDP ratio as non-tax revenue is set to decline in the coming years. With the acceleration in overall economic growth that is being observed currently, renewed efforts on tax compliance should yield beneficial results.