Beautiful Virgin Islands

Tuesday, Jun 24, 2025

‘Tax mobilisation’ could repair economic damage from pandemic, Ukraine war

‘Tax mobilisation’ could repair economic damage from pandemic, Ukraine war

Asian Development Bank said on Wednesday that weak revenues and high spending erase fiscal surpluses and expand deficits across developing Asia.
Developing Asia, including China, has room to increase tax revenues to accommodate vast public spending and achieve their sustainable development goals amid slowing growth due to the Ukraine war and coronavirus pandemic, according to a new report.

The Asian Development Bank said in its “Asian Development Outlook 2022” report on Wednesday that weak revenues and high spending can erase fiscal surpluses and expand deficits across developing Asia, which has the potential to raise three to four percentage points of tax incomes from a pre-pandemic average of around 16 per cent of gross domestic product (GDP).

Government debts as average public gross debt increased to 65.3 per cent of GDP in 2021 from 51.9 per cent in 2019, according to the report.

The Manila-based institution, which estimates China’s economy will still grow by 5 per cent in 2022 having opted to not revise down its forecast, said the virus situation is “highly uncertain right now”.

“If the virus spreads to many Chinese cities and the government maintains the very restrictive Covid policy, it can get out of hand while growth in the coming year could be lowered,” said Albert Park, chief economist at Asian Development Bank.

China last month set its GDP growth target for 2022 at “around 5.5 per cent”, which was at the upper end of the market forecast

On Tuesday, the Washington-based World Bank cut its growth forecasts for East Asia and the Pacific to 5 per cent from 5.4 per cent for this year. China’s economy is expected to also grow by 5 per cent this year, down from a previous estimate of 5.4 per cent.

The development lender warned that regional growth could further drop to 4 per cent this year due to ongoing supply chain shocks, rising interest rates in the United States and diminishing growth in China, which accounts for 86 per cent of regional output.

The World Bank also said real income for households in the region will shrink due to inflation and government debt will limit how fiscal policymakers can respond.

“Tax mobilisation can support fiscal repair,” added Park. “Timely fiscal consolidation will be required in many economies to ensure fiscal sustainability.”

The report stated that governments have to make the most of key revenue sources, such as value-added tax (VAT), personal and corporate incomes and property taxes, that are consistent with local priorities and capacities.

VAT rates across developing Asia averaged 11.9 per cent, compared with 15 per cent in Latin America and 19.7 per cent in high-income Organisation for Economic Co-operation and Development (OECD) countries, the Asian Development Bank report added.

“VAT on imported goods can normally be collected at the border, but not for imported digital products delivered directly online to customers,” said Park. “Rising digital commerce in the region needs careful management by tax authorities.”

The region’s top marginal personal income tax rate of around 27 per cent is lower than 40 per cent in OECD countries, according to the report, with the exception of India, Papua New Guinea and China that have their average comparable to OECD or even higher.

“Taxing individuals’ capital income can promote progressivity because [the] wealthy own a disproportionate share of capital,” said Park, adding that there are implementation challenges because offshore assets can help hinder tax enforcement.

The report also suggested that a well-designed property tax with “sufficiently high rates” can bolster revenue for subnational governments because tax liability on “immovable property” is difficult to evade.

Other new income revenues include levying environmental tax like carbon pricing and corrective health taxes on alcohol and tobacco to 0.6 per cent of GDP, the report suggested.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
×