Remarks by Jiro Tominaga, Country Director, ADB Indonesia Resident Mission, at the Asia Initiative Ministerial Meeting and Signing Ceremony, 14 July 2022, Bali, Indonesia

Distinguished Ministers, excellencies. On behalf of the President of the Asian Development Bank, Masatsugu Asakawa, I thank you for inviting ADB to participate at this Roundtable.

The Asia Pacific economies need to mobilize more revenue to meet their many challenges. ADB estimated earlier that developing Asia and the Pacific need $1.7 trillion per year to support climate resilient infrastructure.

External finance can help, but strengthening domestic resource mobilization (DRM) is key.

Even before the pandemic, however, many developing member countries had tax yields below 15% of GDP. The reasons include narrow tax bases and limited tax administration capacity.

One way to broaden the base is to curb illicit financial flows and tax evasion. These measures, however, require global coordination.

ADB supports international tax cooperation and information sharing.

In the Asia Pacific, although there are important tax communities, they do not currently provide a platform for strategic dialogue, and the country coverage is sometimes limited. ADB has created a regional tax hub, which will foster strategic dialogue, institutional and capacity development, information and ideas exchange, and collaboration across development partners.

ADB has stepped up technical assistance for our developing member countries to join the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and to implement the reforms needed to benefit from the tax transparency standards.

A sound domestic legal framework and participation in international forums to enhance consistency, cooperation, and information exchange are important, but not sufficient.

Many jurisdictions could benefit from building their own internal capacity further, for instance, through strengthening staff capabilities in administering and enforcing international tax laws and improve information exchange and data analysis. ADB therefore strongly supports countries’ efforts to boost tax administration capacity.

We are proud to be partners in the Asia Initiative, which will play an important role in promoting tax transparency standards and supporting post-pandemic recovery. We look forward to closely collaborating with you all.

Thank you.

Speaker