Governments raise revenues to pay for goods and public services, repay public debt and associated interest, and redistribute income across society. Public revenues are raised through taxes and non-tax sources (such as grants, interest income, fees and fines). Public revenue levels are determined by factors such as government policies, tax rates, the structure and size of the economy, current economic conditions, and the effectiveness of revenue collection. Public revenue levels in SEA countries dipped significantly during COVID-19. While they have now largely recovered, a focus on revenue mobilisation would support governments in the region in shifting public finances to a more sustainable basis for the longer term.
In 2023, general government revenues across SEA countries averaged 17.8% of GDP (Figure 2.10), nearly matching the pre-COVID-19 level of 17.9% recorded in 2019. Public revenues increased slightly in Lao PDR (from 15.4% of GDP to 16.4%) and Singapore (from 17.8% to 18.3%). Revenue levels remained steady in Thailand (20.9%) and the Philippines (20.3%). Brunei Darussalam recorded a fall in revenues from 28.8% of GDP to 18.5%. Unlike other countries in the region, Brunei Darussalam generates more than 70% of its revenue from oil and gas sales, so revenues are affected by market prices (ADB, 2024). Revenues in the SEA region remain below the average of 38.0% in OECD Member countries in 2023 and have declined from a peak of 20.1% in 2008 (Online Figure D.1.2). Countries in the region for which estimates are available have historically tended to increase revenues at a pace roughly equal to, or slightly faster than, GDP growth (OECD, 2024a). Reforms to improve domestic revenue mobilisation capacity across the region would support governments in managing their public debt and increasing the amounts of funding available to implement their policy priorities and investment plans.
General government revenue per capita compares the absolute amount of resources governments in different countries have to meet the needs of each citizen. In 2023, revenue per capita averaged USD 3 170 PPP across SEA countries (Figure 2.11). This was a substantial increase from approximately USD 2 530 PPP in 2019. Revenues per capita increased in seven of the nine SEA countries, with the largest increase in Singapore, rising from around USD 18 750 PPP in 2019 to USD 26 750 PPP in 2023. The increase has been driven by the region's rising GDP. However, revenues per capita in the region remain substantially below those of OECD countries. Six SEA countries collected less than USD 5 000 PPP per capita in 2023, compared to an average of nearly USD 22 800 PPP in OECD countries, reflecting the substantially lower levels of income in several SEA countries than in many OECD countries.
General government revenues per capita in both SEA countries and OECD countries were substantially affected by COVID-19 during 2019-2020 and in some cases 2020-2022 (Figure 2.12). As governments worldwide introduced restrictions on business and social activities to curb the spread of the virus, economic activity declined, along with tax revenue. On average, revenues per capita fell by 10.9% across SEA countries in 2019-2020, a decline greater than in OECD countries, where revenues fell 3.3% per capita over the same period. However, six of the nine countries in the region have since experienced a rebound in revenues, with positive growth in 2022 and 2023.
