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The Asian Development Bank (ADB) will establish a regional hub to promote knowledge sharing and strengthen cooperation on tax policy and tax administration between Asia-Pacific countries and their development partners.
“I firmly believe that one of the keys to success in achieving the [United Nations’] The Sustainable Development Goals (SDGs) in a world reshaped by Covid-19 (coronavirus disease 2019) will reside in the strengthening of the mobilization of national resources (DRG) and international tax cooperation (ITC) ”, said the president of the ADB , Masatsugu Asakawa, at a seminar during the Manila- 53rd Annual Meeting of Regional Multilateral Lenders based on Thursday.
The Regional Center on DRM and ITC will focus on promoting them through close collaboration between financial and tax authorities in developing economies; international organizations, such as the International Monetary Fund, the Organization for Economic Cooperation and Development, and the World Bank; and regional tax associations.
According to Asakawa, the 2018 average tax-to-GDP (gross domestic product) ratios of developing Asia (17.6 percent), Pacific (22.2 percent), Central and West Asia (16.8 percent), East Asia (16.4 percent), South Asia (15.3 percent) and Southeast Asia (14.8 percent) are substantially lower than the OECD country average of 24.9 percent.
Key considerations for DRM amid the coronavirus pandemic include striking a balance between increasing tax revenue and promoting investment; leverage fiscal policy measures to regain a strong growth trajectory; and protect the tax base from base erosion and profit transfer risks, in particular the tax challenges of digitizing the economy, as well as tax evasion.
The center also fulfills multiple functions, such as institutional and capacity development, including information exchange; knowledge sharing between partners, international financial institutions, bilateral revenue organizations and developing economies; and coordination of collaboration and development among development partners.
“This center will serve as an open platform where countries and development partners can collaborate closely to share experiences and can coordinate development support,” Asakawa said.
The ADB will seek to bring together professionals from tax policy bodies and tax administration agencies.
“At this center, the ADB would like to facilitate knowledge sharing among members on how to balance increasing tax revenue and promoting economic activity and how to adopt international standards on best practices and tax transparency,” Asakawa said.
He also said that by establishing the center, the ADB will also incorporate DRM and ITC into its operations, such as technical assistance and policy-based loans to help governments improve their DRM capacity and adoption of standards. international prosecutors.
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