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Mr. Toshiya Ohtsu, Director for International Issues on Taxation, Tax Bureau, Japan’s Ministry of Finance; distinguished delegates; eminent resource speakers; ladies and gentlemen:

On behalf of the Asian Development Bank (ADB) and the Asian Development Bank Institute (ADBI), I would like to welcome all of you to the Seventeenth Tax Conference. The ADB and ADBI are pleased to be part of this important event.

As you may be aware, this annual conference has brought together tax officials and experts to discuss national and international taxation policies and issues. Our second comprehensive review conducted two years ago found that past conferences had contributed to improving the effectiveness of tax policies and the efficiency of tax administration in participating ADB developing member countries. I am told this was attributable at least partly to the high quality of presentations made by resource speakers, the active interaction among all participants, and the resulting, higher awareness of the importance of improving tax policies and tax administration in each country.

It is in this respect that this conference is expected to continue to contribute to enhancing the quality of tax policymaking and administration in Asian developing countries.

II. Emerging Issues and Challenges

Needless to say, tax policy can play a key role in fostering economic development and reducing poverty. For example, different tax systems can have different impacts on the speed and pattern of economic development and the distribution of income and wealth in a country. A well-designed tax system can promote balanced economic growth and development, benefits of which can be broadly shared by many.

One key issue is the value-added tax (VAT) system. In recent years, there has been an emphasis in many countries on indirect taxes such as value-added taxes as they allow tax authorities to broaden their tax base and, to some extent, offset decreases in customs duty revenues due to trade liberalization. The benefits of VAT, however, depend on how effectively the system can be implemented.

On the international front new issues and challenges continue to emerge, as economic activities become increasingly borderless. For example, together with globalization and regionalization, the number of international tax treaties has risen rapidly, which could lead to greater international tax competition, tax evasion and tax avoidance if tax treatment differs significantly among these treaties. One of the consequences is the under-collection of tax revenues. To minimize this type of problem, close cooperation and coordination among tax authorities are increasingly needed.

Unfortunately, there is currently no global or regional organization for taxation that could provide such an official coordination role. Until such time when an official international organization for taxation is set up, ADB and ADBI are pleased to continue our support for this annual event so that it functions as a regional forum for exchanging views on key emerging taxation issues.

III. The Seventeenth Tax Conference

I am pleased to note that this conference will start off with a keynote address on “Adapting Tax Systems to Economic and Social Development” by a distinguished international tax expert, Professor Frans Vanistendael of Leuven University, who is the Academic Chairman of the Amsterdam-based International Bureau of Fiscal Documentation (IBFD).

Four key issues will be taken up over the course of the conference in the next few days. The first issue is the progress of various tax reforms, including income tax reform. Experts from India, New Zealand, Pakistan and the Philippines will be sharing with us their views and experiences in tax reforms. Also, thanks to your active contributions, we have been able to compile a summary of your on-going tax reforms, which is a good reference for anyone interested in the subject.

Second, with globalization and regionalization of economic activities, including foreign direct investment, developing countries have been increasingly exposed to cross-border tax issues, such as transfer pricing and tax competition. Tax experts from the OECD; Australia; Hong Kong and Japan will share with us their views and experiences on these key issues, their expected impact and how to properly address them to minimize their adverse impact, if any.

The third issue is design, planning, implementation and improvement of VAT. A practitioner from the private sector and a tax administrator from France will address VAT planning, implementation and best practices, and draw some applicable lessons for Asia and the Pacific.

Lastly, we will be looking for ways and means to further enhance policy dialogue and cooperation among tax policymakers and administrators in Asia and the Pacific, learning from the experience of the OECD.

IV. Conclusion

In closing, I would like to express our sincere gratitude to the Government of Japan for its continued, generous financial support since the inception of this annual conference in 1990. I would also like to thank the OECD, the IBFD, and our resource speakers and experts for their contributions and support for this event.

Finally, I wish you many rewarding deliberations with your active participation in the coming days. At the same time, I hope that you can find some extra time to go around and enjoy Tokyo and Japan.

Thank you.