A Comparative Analysis of Tax Administration in Asia and the Pacific: 2018 Edition | Asian Development Bank

A Comparative Analysis of Tax Administration in Asia and the Pacific: 2018 Edition

Publication | July 2018
A Comparative Analysis of Tax Administration in Asia and the Pacific: 2018 Edition

This comparative analysis of administrative frameworks, functions, and performance of revenue bodies in 28 Asia–Pacific economies includes developments and trends in tax administration practice and performance.

The analysis and practical guidance provided in this report are based on surveys of revenue bodies conducted in 2016 and 2017, along with accompanying research of revenue bodies’ corporate documents, and guidance and diagnostic materials published by international organizations that seek to promote improvements in tax administration. This report also encourages governments and revenue officials to identify opportunities to enhance the operation of tax systems.

It is third in the series on ADB's tax administration that aims to help revenue bodies and governments identify opportunities for enhancing the operation of their tax systems by sharing internationally comparable data on aspects of tax systems and their administration. However, considerable care needs be taken with international comparisons of tax administration setups and performance-related data. In this report, ADB adopted the International Survey on Revenue Administrations survey instrument.

Highlights

Some important observations and conclusions emerging from the analyses include the following:

  • The average tax/GDP (%) for the 28 economies covered by this series was 17.3% in 2015. only seven economies (i.e., Australia, Cambodia, Japan, Myanmar, Nepal, the People’s Republic of China, and the Philippines) show consistent year-on-year growth in overall tax revenue collections (% of GDP) in the 5 years up to 2015.
  • In line with international best practice, the vast majority of economies have established a single or unified national revenue body, administering both direct and indirect taxes and, in most cases, organized along functional lines and with a dedicated large taxpayer division.
  • Many revenue bodies lack the level of autonomy needed to become fully effective organizations, particularly in relation to aspects of budget and human resource management.
  • While most revenue bodies report having a formal compliance risk management process, relatively very few publicly report on how this critical area of tax administration is conducted.
  • The compliance risk areas most frequently reported by revenue bodies were (i) aggressive tax avoidance, (ii) value-added tax fraud schemes and practices, (iii) base erosion and profit shifting, and (iv) the shadow economy.
  • The complex and rapidly changing environment in which revenue bodies must operate dictates the need for a strong organizational capacity for innovation and reform implementation and a highly motivated and engaged workforce.
  • just about all revenue bodies report having a formal strategy to improve service delivery, with objectives most often related to reducing taxpayers’ compliance burden, improving taxpayers’ certainty with the laws application and their overall satisfaction with the services delivered, and reducing operational costs.
  • Using a variety of comparative measures, the series demonstrates that the resources invested in overall tax administration operations in many developing economies, especially for staffing, are at extremely low levels.

This report is part of an ADB regional capacity development technical assistance project for Strengthening Tax Policy and Administration Capacity to Mobilize Domestic Resources, which was approved in November 2016. The two reports produced in 2014 and 2016 were under the ADB regional technical assistance project Tax Policy and Administration Research and Capacity Development.

Contents 

  • Executive Summary
  • Introduction
  • Tax Revenues and Tax Structures
  • Institutions, Organization, and Governance
  • Managing Taxpayers’ Compliance
  • Human Resource Management
  • Tax Administration Operations
  • Operating Budgets, Staffing, and Related Matters
  • Appendix: Selected References, and Country Data and Survey Tabulations