THE ADB
has initiated a
technical assistance (TA) project to strengthen the capacity of eight Asian
countries to exchange tax information and check cross-border tax evasion.
To be completed be completed by 31st March 2016, TA project captioned ‘Enhancing
Transparency and Exchange of Information for Tax Purposes’ will strengthen
the capacity of tax authorities People’s Republic of China, Indonesia, Malaysia,
Mongolia, Papua New Guinea, the Philippines, Thailand, and Viet Nam
According to TA proposal prepared by ADB staff, the project will focus on developing
training modules, and delivering training courses targeting tax officials (i)
in charge of exchanging information with foreign tax authorities at their country
headquarters, and (ii) in charge of investigating cross-border tax evasion
cases at audit and investigation departments.
The project would recommend steps for strengthening international cooperation
and exchange of information for tax purposes produced.
ADB will publish a recommendation report proposing further areas for capacity
development in regional and country-level contexts with respect to eight countries
published and disseminated by March 2015.
The project is aiming for adoption of the new exchange-of-information and audit
regime, based on TA recommendations and training courses, in at least two countries
by 2016.
A ‘performance target’ of the project is to facilitate increase in the ratio
of tax revenue to GDP by 3% in the eight countries by 2020.
The project outline prepared by ADB staff says: “Rapid globalization of financial
services, investment, and trade has significantly impacted the revenue base
of developing countries. Cross-border financial transactions are increasingly
used to aggressively avoid and evade taxes, resulting in reduced domestic tax
revenues through the use of offshore financial centers. The problem is particularly
acute in Asia.”
It adds: “Developing countries lost $5.6 trillion in illicit financial outflows
in 2001-2010; Asia accounted for 61% of the total illicit outflows, which are
illegally transferred and accumulated outside of the taxpayers’ countries of
residence.”
The project is based on the assumption that the tax authorities in participating
countries are committed to tackling aggressive tax avoidance schemes through
international cooperation.
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