ISLAMABAD: The Asian Development Bank (ADB) has launched an Asia Pacific Tax Hub to create an open and inclusive platform to promote strategic policy dialogue, improve knowledge sharing, and strengthen coordination on tax policy and administration among ADB, its members, and development partners.
The hub will maximise regional and international resources to strengthen domestic resource mobilization (DRM) and international tax cooperation (ITC) in the ADB’s developing member countries (DMCs).
“Domestic resource mobilization has emerged as a major strategic priority for our DMCs at this moment. It will be vital in the effort to address debt sustainability and to achieve the Sustainable Development Goals,” ADB president Masatsugu Asakawa said in a seminar at ADB’s 54th Annual Meeting.
“The lack of a pan-regional tax community has been a unique and significant shortcoming for Asia and the pacific. To address this, I would like to announce today the official launch of the Asia Pacific Tax Hub.”
The hub will support DMCs on three main building blocks: preparation of medium-term revenue strategies (MTRS); roadmaps for the automation of tax administration, and proactive participation in international tax initiatives.
The hub aims to play a key role in these agendas by stimulating regional dialogue and knowledge sharing on needed reforms.
Through the hub, the ADB will coordinate closely with the International Monetary Fund (IMF) to support DMCs as they formulate country-specific MTRS, with activities such as regional workshops in collaboration with the Platform for Collaboration on Tax and diagnostic tools like the Tax Administration Diagnostic Assessment Tool; conduct needs assessments to prepare roadmaps for the automation of tax administrations in DMCs, and support their implementation in collaboration with development partners and leading countries in this area; facilitate policy dialogue with the Organisation for Economic Co-operation and Development (OECD) and stimulate proactive participation of DMCs in the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and the Global Forum on Transparency and Exchange of Information for Tax Purposes; and apply its financial instruments, such as policy-based and project lending, and technical assistance to promote DRM, adoption of international tax standards, and strengthened technology investment by revenue agencies.
The hub will organise a first high-level conference by the fourth quarter of 2021 to report on progress and discuss next steps on the three building blocks of the hub, including details of the operations of the hub secretariat and steering committee.
Asakawa was joined in the seminar by Japan Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services Taro Aso; IMF Assistant Director of Fiscal Affairs Department Katherine Baer; World Bank Group Acting Vice President for Equitable Growth, Finance, and Institutions and Director of Prospects Group Ayhan Kose; and OECD Centre for Tax Policy and Administration Director Pascal Saint-Amans. Singapore Deputy Commissioner of Inland Revenue Authority Huey Min Chia-Tern moderated the panel.
The panel also included representatives from tax authorities from Australia, the Republic of Korea, and Thailand, and the Department of Finance of the Philippines.
According to an article on the Bank website after spending heavily to support their economies during the Covid-19 pandemic, countries in Asia and the Pacific need to look to tax and financial management reforms to mobilise resources for a sustainable, equitable recovery.
The Covid-19 pandemic has forced Asia and Pacific countries to spend trillions on their economies and set back recent poverty reduction gains by years.
Tax yields in Developing Asia average about 17.6 percent of the GDP, well below the OECD average, with many countries suffering from high levels of tax evasion and weak administration.
Mobilising domestic resources through tax reforms and stronger financial management will help stressed economies raise revenues for sustainable growth.
Options for broadening the tax base include removing tax exemptions, imposing wealth and intergenerational taxes, hiking property taxes and adopting carbon and digital service taxes.
Addressing at the finance ministers’ and central bank governors’ meeting, ADB president Masatsugu Asakawa said since announcing the ADB’s $20 billion support package in April last year, they have already committed $17.4 billion out of this package through grants, technical assistance, and loans to governments and businesses.
"We also mobilized $12.8 billion in co-financing”, the president added.
The ADB’s Covid-19 Pandemic Response Option, or CPRO, provides quick-disbursing budget support for countercyclical economic stimulus in the DMCs.
So far, the bank has provided $10.2 billion in CPRO to 26 countries, including $5.0 billion for five ASEAN economies, he added. He highlighted two key policy priorities to ensure a strong and inclusive recovery. The first is to support the digital transformation that has accelerated during the pandemic.
The second is to enhance domestic resource mobilisation (DRM) capacity in our DMCs, he added.
Copyright Business Recorder, 2021
Comments
Comments are closed.