fbpx 47149-001: Enhancing Transparency and Exchange of Information for Tax Purposes | Asian Development Bank

Regional: Enhancing Transparency and Exchange of Information for Tax Purposes

Sovereign (Public) Project | 47149-001 Status: Closed

The rapid globalization of financial services, investment and trade has imposed a significant impact on developing countries' revenue base. Cross border financial transactions are increasingly employed for aggressive tax avoidance, which result in the erosion of domestic tax revenues to the outside of developing countries, often to offshore financial centers. The issue is particularly acute in Asia. According to Global Financial Integrity, a Washington-based NGO's latest report, developing countries lost a total of 5.6 trillion US dollars in illicit financial outflows including tax evasion in 2001-2010, and Asia accounted for 61 % of the total illicit outflows . In order to counter international tax avoidance schemes and the erosion of domestic tax revenues, the tax authorities are increasingly required to strengthening their international network and capacity for the exchange of information with foreign tax authorities.

Project Details

Project Officer
Yuji Miyaki Sustainable Development and Climate Change Department Request for information
Country
  • Regional
Modality
  • Technical Assistance
Sector
  • Public sector management
 
Project Name Enhancing Transparency and Exchange of Information for Tax Purposes
Project Number 47149-001
Country Regional
Indonesia
Malaysia
Mongolia
Philippines
Papua New Guinea
China, People's Republic of
Thailand
Viet Nam
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8640-REG: Enhancing Transparency and Exchange of Information for Tax Purposes
Japan Fund for Poverty Reduction US$ 820,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Public sector management / Public expenditure and fiscal management

Gender Equity and Mainstreaming No gender elements
Description

The rapid globalization of financial services, investment and trade has imposed a significant impact on developing countries' revenue base. Cross border financial transactions are increasingly employed for aggressive tax avoidance, which result in the erosion of domestic tax revenues to the outside of developing countries, often to offshore financial centers. The issue is particularly acute in Asia. According to Global Financial Integrity, a Washington-based NGO's latest report, developing countries lost a total of 5.6 trillion US dollars in illicit financial outflows including tax evasion in 2001-2010, and Asia accounted for 61 % of the total illicit outflows . In order to counter international tax avoidance schemes and the erosion of domestic tax revenues, the tax authorities are increasingly required to strengthening their international network and capacity for the exchange of information with foreign tax authorities.

This regional TA project focuses on the capacity development of 8 DMC members of the Study Group on Asian Tax Administration and Reserach (SGATAR), i.e. Indonesia, Malaysia, Mongolia, Papua New Guinea, the PRC, the Philippines, Thailand, and Vietnam, with respect to the exchange of information for tax purposes, and aims to enhance the framework of regional cooperation among the SGATAR member tax authorities.

Project Rationale and Linkage to Country/Regional Strategy

The risk of international tax avoidance and demand for the exchange of information among the Study Group on Asian Tax Administration and Research (SGATAR)'s developing member economies increase; according to Global Financial Integrity's global ranking on the estimated amount of illicit financial outflows in 2001-2010, the PRC is ranked the 1st out of 143 countries, and Malaysia the 3rd, the Philippines the 6th, Indonesia the 9th, Thailand the 13th, Vietnam the 33rd, Papua New Guinea the 99th and Mongolia the 111th respectively .

In many SGATAR member countries, a majority of exchange of information cases are those with the SGATAR member countries. For example, at the National Tax Agency, Japan, in Operation Years 2010 and 2011, more than 60% of exchange-of-information cases were held within SGATAR members. In particular, the exchange of information with SGATAR's developing member countries increases its importance; the percentage of exchange-of-information cases with the SGATAR's developing member countries increased from 15% in Operation Year 2010 to more than 20% in Operation Year 2011.

The OECD'sGlobal Forum on Transparency and Exchange of Information for Tax Purposes is promoting internationally recognized standards . While the OECD Global Forum's 118 member economies committed to implement the internationally recognized standards include all of the SGATAR's developed member economies except Taipei,China, only half of the SGATAR's developing member countries, i.e. Indonesia, Malaysia, the Philippines and the PRC are the OECD Global Forum's members, which imposes a further risk to widen capacity gap among SGATAR member economies. The OECD's Global Forum has also recognized the necessity of capacity development activities such as training seminars in Southeast Asia including Indonesia, Malaysia, The Philippines, Thailand and Vietnam , and it has expressed its support for the ADB to lead capacity development activities for SGATAR member countries.

Impact Sustainable tax base in participant DMCs through strengthened international cooperation mechanism.
Project Outcome
Description of Outcome Enhanced enforcement capacity in the member tax authorities of the Study Group on Asian Tax Administration and Research (SGATAR).
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Technical consultation session on international standards on the exchange of information for up to four DMCs delivered.

Recommendations for strengthening international cooperation and exchange of information produced.

Training courses for (i) exchange of information, and (ii) audit to counter international tax avoidance and evasion designed and delivered.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Yuji Miyaki
Responsible ADB Department Sustainable Development and Climate Change Department
Responsible ADB Division SDGG
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 17 May 2013
Fact Finding 17 Jun 2013 to 04 Jul 2013
MRM -
Approval 22 Apr 2014
Last Review Mission -
Last PDS Update 29 May 2013

TA 8640-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Apr 2014 - 22 Apr 2014 31 Mar 2016 31 Jul 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 820,000.00 0.00 0.00 0.00 0.00 820,000.00 22 Apr 2014 547,851.30

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

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Contracts Awarded

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Procurement Plan

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