Priorities for Strengthening Key Revenue Sources in Asia

Sanjeev Gupta and Joao Jalles
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Sanjeev Gupta: Center for Global Development

No 612, Working Papers from Center for Global Development

Abstract: This paper discusses the evolution of key taxes in the past 20 years in developing Asia and fiscal challenges that these countries face in light of the COVID-19 pandemic. It presents estimates of tax capacity and tax potential and discusses the productivity of key taxes in the region. The paper finds that developing Asia has potential to raise more revenues—of up to 4 percent of GDP on average. While corporate income tax productivity is high vis-à-vis other regions, the same does not apply to personal income tax or the value added tax. There is potential to raise more revenues by improving the compliance and design of the value added tax. It is important to ensure that the tax systems in developing Asia become more progressive with expansion of personal income and property taxes. Increased allocations and better targeting of social spending would help offset some of the regressivity stemming from indirect taxes. An important source of revenue leakage is tax expenditures granted by countries in the region.

JEL-codes: C33 H20 H23 H30 N15 O53 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2022-04-06
New Economics Papers: this item is included in nep-pbe and nep-sea
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Journal Article: Priorities for Strengthening Key Revenue Sources in Asia (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:612

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