ADB to establish regional hub to help improve resource mobilization
ISLAMABAD: The Asian Development Bank (ADB) is establishing a regional hub to promote knowledge sharing and strengthen cooperation on tax policy and tax administration across economies in Asia and the Pacific and their development partners.
“I firmly believe that one of the keys to success in achieving the Sustainable Development Goals (SDGs) in a world reshaped by COVID-19 (coronavirus disease) will lie in strengthening domestic resource mobilization (DRM) and international tax cooperation (ITC),” said ADB President Masatsugu Asakawa in a seminar today at ADB’s 53rd Annual Meeting.
The Regional Hub on DRM and ITC will focus on promoting DRM and ITC through close collaboration among finance and tax authorities of developing economies; international organizations such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the World Bank; and regional tax associations.
Despite many developing economies having maintained strong and steady gross domestic product (GDP) growth in recent years, tax yields have not increased proportionately. Even prior to the pandemic, many economies did not achieve a minimum tax yield of 15% of GDP—a level now widely regarded as the minimum required for sustainable development. The COVID-19 pandemic has worsened the situation due to increased pressure on economies’ expenditures and a decrease in tax revenue, leaving little room to further increase external borrowing.