In 2014, the tax-to-GDP ratios of Indonesia, Malaysia, the Philippines and Singapore were below 17% of GDP compared to Japan and Korea, which both recorded tax-to-GDP ratios above 24%,according to new data released in the third edition of the OECD’s annual publication Revenue Statistics in Asian Countries. The report, which includes Singapore for the first time, shows that the tax-to-GDP ratios in all six Asian countries are lower than the OECD average of 34.2%, especially in emerging Southeast Asian economies, where scope for increased tax mobilisation remains.
Levels of tax revenues among the six Asian countries ranged from 12.2% of GDP in Indonesia to 32% in Japan in 2014. The tax-to-GDP ratio in Japan, Korea, the Philippines and Singapore increased while it decreased slightly in Indonesia and Malaysia in 2014.
Putting these figures into historical context, apart from Singapore, the tax-to-GDP ratios for the remaining five countries in 2014 were higher than in 2000, in part due to tax reforms and the modernisation of tax systems and administrations. The size of the increases between 2000 and 2014 ranged from 0.9 percentage points in the Philippines to 5.4 percentage points in Japan.
Revenue Statistics in Asian Countries 2016 shows that corporate income taxes are a significant source of tax revenue in all six countries. The share of corporate income taxes as a percentage of total tax revenues in all six countries was higher than the OECD average of 8.8%. It ranged from 12.8% in Korea to 52.6% in Malaysia in 2014, although in each country the share was lower than in 2013. In contrast, the share of Value Added Tax (VAT) to total tax revenues in 2014 remains lower than the OECD average of 20% in all countries - due to generally lower VAT rates - except for Indonesia where the share was 32%.
In addition, a special feature of the report discusses the development of large taxpayer offices in tax administrations in Asian and Pacific countries that increasingly have adopted segmented approaches to tax administration to better mobilise tax revenue from large companies and manage their complex tax matters. For example, in the Philippines, the Bureau of Internal Revenue (BIR) stepped up the monitoring of large taxpayers and took measures to address compliance issues in 2015. In Indonesia the Foreign Enterprise and Individual Tax Office was strengthened to better manage all tax matters relating to foreign-owned firms and individual taxpayers.
Revenue Statistics in Asian countries contributes to the Regional Policy Network on tax of the OECD’s Southeast Asia Regional Programme (SEARP) launched in 2014 that aims at strengthening the relationship between OECD and Southeast Asian countries.
Revenue Statistics in Asian Countries is part of the OECD’s Global Revenue Statistics publications, which include databases of comparable statistics on tax revenue across the economies of Africa, Latin America and the Caribbean and the OECD countries to facilitate transparent policy dialogue and equip policy makers to assess alternative tax reforms.
The report is a joint publication by the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration and the OECD Development Centre in co-operation with the Asian Development Bank.
For more information on the report, please visit: www.oecd.org/tax/revenue-statistics-in-asian-countries-2016-9789264266483-en.htm
For more information or to get a copy of the report, journalists should contact Michelle Harding (+33 1 45 24 9368) in the OECD Centre for Tax Policy and Administration, Kensuke Tanaka (+33 1 45 24 8733) in the OECD Development Centre or the OECD Press Office (+33 1 45 24 9700).