Regional : Nineteenth Tax Conference

Public sector management / Public expenditure and fiscal management

To support annual tax conference in collaboration with ADB Institute, Tokyo in cooperation with the Tax Bureau of the Ministry of Finance, Japan and OECD's Centre for Tax Policy Administration, International Monetary fund, United Nations and Amsterdam-based International Bureau of fiscal Documentation (IBFD).

The proposed regional small-scale capacity development technical assistance (RS-CDTA) will finance The Nineteenth Tax Conference for twelve developing member countries (DMCs) in the Central, West and East Asian Regions scheduled on 4-7 October 2011 at the Asian Development Bank Institute (ADBI) premises in Tokyo, Japan.

The tax conference program, established in 1991, has contributed to the creation and modification of tax laws, organizational changes in tax administration and national training activities in taxation of DMCs. Since 1998, it has become a joint program including funding between Asian Development Bank (ADB) and the ADBI in Tokyo, which is the regular venue of the program. It has helped strengthen the tax policy-making capacity and enhance the efficiency of tax administration in DMCs. With the increased international economic transactions reflecting globalization, the tax conference program has focused on model tax treaties and been held on a sub-regional basis since 2009.

Tax policy is an important lever for government intervention in economic development. Governments mobilize resources through taxation to promote economic growth and reduce poverty. Taxes provide key signals that affect resource allocation decisions. Tax policies are also an important instrument to promote the equitable distribution of income. Efficient tax policies lead to higher economic efficiency and growth.

Recognizing the importance of taxation, Asian Development Bank (ADB) has supported capacity development activities on taxation since 1991. This tax conference program, financed by the Japan Fund for Poverty Reduction (JFPR), aims to enable developing member countries (DMCs) to design and implement effective and efficient tax policies. ADB has developed a long track record and international visibility in providing capacity development opportunities through an annual forum for updating on emerging issues and exchange of experiences and ideas on taxation among DMC tax policy makers. ADB's knowledge sharing role is particularly important, given that regional activities related to tax policy are still limited.

The growth of international economic transactions has led to new pressures on tax administrations and new risks for businesses and investors. Taxpayers face the risk of double taxation in two jurisdictions, a risk that can inhibit and even stop some cross-border investments. At the same time, tax authorities face risks to collection from profit shifting. Both these issues can be resolved through the conclusion of bilateral tax treaties, which are the only international tools to divide taxing rights between countries, provide a mechanism for resolving disputes on profit shifting, and establish procedures for the exchange of information needed to tax multinational corporations properly. To reflect the trend of globalization, the number of tax treaties is increasing.

There are two important and leading tax treaty models currently used, namely Organisation for Economic Co-operation and Development (OECD) and United Nations (UN) Models; both the models are, to a large extent, similar, although the UN model is more development country-oriented. In order to secure proper collection of income tax, to align the domestic law and practices with international standards, and to acquire sound knowledge and techniques for tax treaty negotiations, provision of capacity development opportunities for senior tax officials is a priority.

While the OECD through its Centre for Tax Policy and Administration (CTPA) has been involved in the tax conference program since 1991, this partnership was strengthened with the renewed Letter of Intent between ADB and OECD signed in 2005.