25/07/2022 - Tax revenues in Asia and the Pacific fell by -1.2% of GDP to 19.1% of GDP on average in 2020 as a result of the COVID-19 pandemic, according to a new OECD report released today.
Revenue Statistics in Asia and the Pacific 2022 provides harmonised data on tax revenues for 28 economies in the region, including Bangladesh, Cambodia, Kyrgyzstan and Pakistan for the first time. The report reveals that the average tax-to-GDP ratio in Asia-Pacific was 19.1% in 2020, lower than the averages for the OECD and Latin America and the Caribbean (LAC). Between 2019 and 2020, tax-to-GDP ratios fell in 19 of the 26 economies for which 2020 data are available.
The first year of the pandemic amplified long-term declines in tax-to-GDP ratios across the region, which fell in 15 of the 26 economies between 2010 and 2020. The pandemic also widened the gap between the Asia-Pacific average and the averages for the OECD and the LAC region: the OECD’s average tax-to-GDP ratio increased by 0.1 percentage points (p.p.) to 33.5% between 2019 and 2020 while the average tax-to-GDP ratio in the LAC region declined by -0.8 p.p. to 21.9%.
Falls in revenue from taxes on goods and services drove the decline in Asia-Pacific’s average tax-to-GDP ratio between 2019 and 2020, decreasing as a percentage of GDP in 21 of the 26 economies for which 2020 data are available. This fall was particularly large for the Pacific Islands covered by the report because of the sharp decline in tourism caused by the pandemic. On average, taxes on goods and services accounted for 50.6% of total tax revenues in the Asia-Pacific region in 2020.
Between 2019 and 2020, revenues from corporate income tax (CIT) fell by -0.1 p.p. in Asia and the Pacific, a more modest decline than was observed in the OECD (-0.4 p.p.) and in the LAC region (-0.2 p.p.). Revenues from personal income tax remained unchanged as a percentage of GDP on average in Asia and the Pacific and in the LAC region, while they increased by 0.3 p.p. in the OECD.
Revenue Statistics in Asia and the Pacific 2022 includes data on non-tax revenues for 19 economies in the region. Between 2019 and 2020, non-tax revenues declined in twelve economies as a percentage of GDP while they increased in seven. In 2020, non-tax revenues exceeded 10% of GDP in Samoa (11.6%), Bhutan (19.8%), Vanuatu (24.0%), the Cook Islands (27.4%), Nauru (67.5%) and Tokelau (218.7%).
The new report also includes a special feature by the Asian Development Bank (ADB) on options for developing countries in Asia to enhance domestic resource mobilisation in the wake of the COVID-19 pandemic. This chapter shows that a large number of countries have the potential to increase tax revenues by optimising existing sources of revenues, making more strategic use of tax expenditures, adapting to the growth of the digital economy and supporting multilateral initiatives to increase revenues from CIT.
Revenue Statistics in Asia and the Pacific is jointly produced by the OECD’s Centre for Tax Policy and Administration and the OECD Development Centre with the co-operation of the ADB, the Pacific Island Tax Administrators Association (PITAA), and the Pacific Community (SPC), and support from the governments of Ireland, Japan, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom.
To access the report, data, key findings, and country notes, visit https://oe.cd/revstatsap.