ADB establishes regional hub for Asia-Pacific tax cooperation

Published September 18, 2020, 6:00 AM

by Chino S. Leyco

The Asian Development Bank (ADB) said it is establishing a regional hub to promote knowledge sharing and strengthen cooperation on tax policy and tax administration among the Asia and the Pacific economies and their development partners.

Masatsugu Asakawa, ADB president (Photo credit:

Masatsugu Asakawa, ADB president said that one of the keys to success in achieving the Sustainable Development Goals (SDGs) in the new normal will lie in strengthening domestic resource mobilization (DRM) and international tax cooperation (ITC).

The Regional Hub will focus on promoting DRM and ITC through close collaboration among finance and tax authorities of developing economies.

It will also cooperate with international organizations such as the International Monetary Fund (IMF), the Organization 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,” ADB said.

“Even prior to the pandemic, many economies did not achieve a minimum tax yield of 15 percent of

GDP—a level now widely regarded as the minimum required for sustainable development,” it added.
But COVID-19 pandemic has further worsened the situation due to increased pressure on economies’ expenditures and a decrease in tax revenue, leaving little room to further increase external borrowing.

To improve tax yields in a fair and equitable manner, ADB urged governments to also cooperate more closely, including to manage aggressive tax planning and combat tax evasion.

 “This requires a higher level of participation in international initiatives such as the Inclusive Framework on BEPS (base erosion and profit shifting) and the Global Forum on Transparency and Exchange of Information for Tax Purposes,” the bank said.

The regional hub will serve multiple functions such as institutional and capacity development, including the exchange of information; knowledge sharing across partners, international financial institutions, bilateral revenue organizations, and developing economies; and collaboration and development coordination across development partners. 

It will be an open and inclusive platform, with a focus on South–South policy dialogue. 

The regional hub will seek to bring together practitioners from tax policy bodies as well as tax administration bodies of developing economies to achieve meaningful progress in tax reform.

The synergy created in this hub will ensure strong value addition and effectiveness in the implementation of necessary reforms.