Overall Score: 53.7 World Rank: 133
limits On Government Regulation
The rigid labor market perpetuates high unemployment and underemployment. In 2014, government efforts to reduce energy subsides, which are very high and a major drain on the budget, sparked violent protests.
An Effieient Capital Market
The underdeveloped financial system is dominated by banks and subject to state influence. nonperforming loans burden the banking sector. obtaining credit for entrepreneurial activity remains difficult. The capital market is rudimentary, with no stock exchange in place.
These declines undermine an already weak economic system. Government corruption is standard. The judiciary is semi-independent, but government weakness makes enforcing the law difficult. The economy is open to trade, but the investment regime remains closed. An underdeveloped financial sector and strict business regulations make it difficult to form and finance new ventures.
Low Tax Rates
The top individual income tax rate is 20 percent, and the top corporate tax rate is 20 percent. Other taxes include a general sales tax and a property tax. The overall tax burden equals 7 percent of gross domestic product.
Yemen’s average tariff rate is 6.2 percent. Yemen joined the WTO in 2014. Courts do not resolve business disputes in a timely manner. The underdeveloped financial system is dominated by banks and subject to state influence.