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%.
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