Beautiful Virgin Islands

Saturday, Jul 05, 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
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
×