Fiscal Year 2026
Capacity Development Activities
Central Bank Operations
Foreign Reserve Management
At the end of August/early September, METAC provided tailored and hands-on guidance to the Central Bank of Yemen’s FX reserves management team. Building on the 2023 mission, it focused on governance, documentation, and portfolio strategy.
Financial Supervision and Regulation
Risk Management Regulations for Banks (May 18-22)
METAC supported the Central Bank of Yemen (CBY) in establishing crucial risk management regulations tailored specifically for the Yemeni banking sector. This initiative prioritizes comprehensive training for CBY supervisors and focused discussions to enhance the regulations. The purpose of the risk management guidelines is to safeguard the integrity of the banking sector by ensuring that banks adopt robust risk controls and risk management processes. By operating within defined limits and adhering to international best practices, these regulations will bolster the banking industry's resilience and instill confidence in Yemen's national financial system.
Capacity development on Islamic Banks (July 13-17)
METAC assisting CBY in a multi-phase initiative aimed at developing and comprehensively implementing the Capital Adequacy Framework and risk management regulations for both conventional and Islamic banks. At this stage, the online training primarily focused on conveying the fundamental concepts related to the regulation and supervision of Islamic banks, thereby enhancing the regulatory and supervisory capabilities of personnel responsible for overseeing these institutions. This initiative was designed to establish a solid foundation for future missions directed towards formulating the Capital Adequacy Framework in accordance with the standards set forth by the Islamic Financial Services Board (IFSB).
Development Capital Adequacy Framework for Islamic Banks
METAC supported the Central Bank of Yemen (CBY) in reinforcing its Capital Adequacy Framework for both conventional and Islamic banks in September. These efforts are aligned with international standards—Basel III Pillar 1 for conventional banks and IFSB-23 for Islamic banks. This follow-up mission focuses on developing draft sample regulations for capital adequacy and creating reporting templates for Islamic banks. These steps are critical to enhancing financial stability and ensuring Yemen’s banking sector meets global best practices.
Development of risk management regulations for Islamic Banks (December 14-18)
METAC strengthened the Central Bank of Yemen’s ability to regulate and supervise Islamic banking by developing a dedicated regulatory annex and supervisory questionnaire that integrate Islamic-finance-specific risks into the existing risk management framework. It enhanced supervisory capacity and technical understanding through targeted discussions and training, while ensuring that risks unique to Islamic banking are addressed alongside conventional prudential risks. Overall, the work advanced Yemen’s alignment with international standards set by the Basel Committee on Banking Supervision and the Islamic Financial Services Board.
Development of Capital Framework (January 18-22)
The mission strengthened the Central Bank of Yemen’s capacity to implement a comprehensive Capital Adequacy Framework for both conventional and Islamic banks by supporting the finalization of regulations, reporting templates, and impact assessment tools aligned with the Basel Committee on Banking Supervision Basel III Pillar 1 framework and Islamic Financial Services Board (IFSB standard-setting body) standards. Through targeted training, technical guidance, and hands-on collaboration, the mission closed key knowledge gaps, enhanced supervisory expertise, and ensured greater harmonization between conventional and Islamic capital frameworks. Overall, it enabled the CBY to operationalize risk-sensitive capital requirements, improving regulatory consistency and strengthening the resilience and stability of Yemen’s banking sector.
Government Finance Statistics and Public Sector Debt Statistics
During August and September, METAC’s GFS and PSDS Advisor Amir Hadziomeragic has played an active role in analyzing data and discussing the Data Adequacy Assessment and Article IV reports for Yemen—the first of their kind in several years. Fiscal data serves as a crucial resource to support Fund surveillance activities within Article IV consultations.
Strengthening Yemen’s Fiscal and Debt Statistics (November 22–27)
METAC supported Yemeni authorities in compiling and disseminating Government Finance Statistics (GFS) and Public Sector Debt Statistics (PSDS). The activity, jointly funded by METAC and the Data for Decisions (D4D) Fund, included capacity-building sessions on GFS and PSDS concepts, IMF–WB quarterly debt reporting requirements, and hands-on training for debt classification and template completion. The mission successfully assessed and improved the quality and consistency of Yemen’s PSDS and GFS data. For PSDS, external debt was reconciled with creditor records, with adjustments made for fully repaid, forgiven, and newly recognized debt, while domestic debt was updated to reflect Sukuk and other new issuances. GFS data verification confirmed overall consistency between financing, revenue, and expenditure flows, though further refinement is needed, including integration of nonfinancial assets and enhanced collaboration between the Ministry of Finance and Central Bank. The mission provided recommendations on comprehensive debt coverage, timely reporting, and quarterly preparation of full GFS statements, which will be supported through ongoing virtual follow-up.
Public Financial Management
Treasury Single Account (TSA) Reforms Implementation
In October, METAC supported a high-level delegation from the Ministry of Finance of Yemen led by the First Undersecretary in the identification of short-term options for TSA structures that modernize existing banking arrangements and enable the consolidation of cash assets without requiring legal or regulatory changes. The authorities developed a vision and a strategic workplan for the implementation of longer-term TSA reforms and identified key prerequisites and measures needed for the implementation. The mission delivered a two-day workshop to enhance MoF’s understanding of the TSA concept and the differences between centralized and decentralized systems of budget execution. It presented different international examples for institutional arrangements, technological infrastructure for TSA, and reform paths for TSA implementation and budget execution. A representative from Jordan’s MoF presented the country’s TSA reform experience and shared the lessons learnt.
Revenue Administration
Yemen Short- Term Emergency Revenue Plan
In August–September 2025, a joint HQ–METAC mission supported the General Taxation Department (GTD) of Yemen in developing a short-term emergency revenue plan. The mission brought together representatives from the Ministry of Finance, the GTD, and customs authorities, fostering collaboration and integrated approaches to revenue management. The team worked with Yemeni counterparts to review existing reform plans and identify new opportunities for strengthening tax administration. These efforts resulted in a set of targeted short-term actions, designed to enhance coordination, promote transparency, and support the adoption of modern practices.
Advancing Legal Reform: Drafting Yemen’s Tax Procedures Code
As part of a three-phase initiative to modernize Yemen tax administration, the October mission marked the second phase of support to the GTD in developing a comprehensive Tax Procedures Code (TPC). This phase focused on drafting the TPC, building on a previous diagnostic mission. The TPC is a simple yet comprehensive report that consolidates and harmonizes administrative provisions across core taxes, including income tax and GST. The draft code reflects international good practices and is tailored to Yemen’s institutional context, aiming to improve procedural clarity and transparency, taxpayer compliance, and administrative efficiency. It will be presented to Yemeni authorities during Phase 3, where it will be reviewed, discussed, and finalized.
Assist the general directorate of taxes in the development of a tax procedure code - phase 3 (December 1-4)
Yemen had developed a unified Tax Procedures Code (TPC) with METAC support, culminating in a finalized draft agreed with the Ministry of Finance Yemen and the General Taxation Department. The TPC harmonizes fragmented tax procedures across existing laws, introduces modern administrative measures such as electronic tax systems and clearer rulings, and strengthens key areas including appeals, enforcement, and penalties. Through extensive consultations, the work ensured the framework is tailored to Yemen’s context while building institutional capacity and consensus. Additionally, a practical reform option through a unified Tax Procedures Regulation was discussed with the authorities, offering a faster alternative to legislative approval. This would establish a foundation for a more coherent, efficient, and transparent tax administration. Should the authorities choose this path, further assistance will be needed.
Tax Policy
Review of the General Sales Tax
A mission during 13-17 September reviewed the general sales tax, the border crossing levies – including the advanced profit withholding tax payments – and the transactional withholding taxes. Discussions with representatives of the Ministry of Finance and the General Tax administration identified legislative changes and policy design options aimed at strengthening revenue collection and supporting tax policy objectives.
Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)
EU-OECD Project on Promoting Economic Resilience in Yemen (November 25-27)
The mission contributed to strengthening dialogue and capacity on anti-corruption and anti-money laundering in Yemen by delivering a well-received presentation at an EU–Organisation for Economic Co-operation and Development workshop under the “Promoting Economic Resilience in Yemen” initiative. It highlighted the link between systemic corruption and AML/CFT effectiveness, and promoted the use of AML tools to enhance transparency and accountability.
