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Philippines: ADB urges faster work on regional tax hub
MANILA, Philippines — The Asian Development Bank has called on governments in Asia-Pacific to speed up progress on the tax hub to address debt problems and inequality hounding most countries.
ADB said this would also improve domestic resource mobilization (DRM) or the process through which countries raise and spend their own funds to provide for their people, and is considered to be the long-term path to sustainable development finance.
The Manila-based multilateral lender also encouraged the expansion of international tax cooperation to help future generations avoid unsustainable debt and persistent inequality.
The Philippines and many other countries in the region are under enormous pressure in terms of budget and public debt resulting from large-scale fiscal expenditures due to the pandemic.
ADB president Masatsugu Asakawa said Asia-Pacific needs substantial and predictable revenue streams to achieve the Sustainable Development Goals, including greater climate change ambitions, expanded health coverage and more effective social protection.
The Asia-Pacific Tax Hub, therefore, would help ADB’s developing member countries to more effectively mobilize domestic resources to address such needs.
“I encourage governments to commit to working with the Tax Hub to address these challenges as they support their medium-term development,” Asakawa said.
“I would like to see increased sharing and exchange of experiences and best practices in reforms across the region, to ensure stronger and more coordinated implementation of tax reform. This will lead to higher revenues and social spending, which are badly needed in our member countries,” he said.
The Tax Hub aims 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.
It will also maximize regional and international resources for DRM and international tax cooperation.
The Tax Hub will support developing member countries on three main building blocks, namely, preparation of medium-term revenue strategies, road maps for the automation of tax administration, and proactive participation in international tax initiatives.
Since it started in May this year, the Tax Hub has conducted consultations with more than 40 ADB members, development partners and tax associations, and received strong support for a region-wide forum.
The ADB recently set up a foundational steering committee that will lead the Tax Hub and chart its future activities.
The committee will adopt an inclusive approach to charting out the future course of the Tax Hub, its governance structure and future steering committees.
“We must act now to mobilize domestic resources that expand fiscal space, maintain intergenerational equity and meet the development challenges of our times – including recovery from the pandemic and climate change,” Asakawa said.
Source: https://www.philstar.com/business/2021/11/26/2143785/adb-urges-faster-work-regional-tax-hub