Strengthening Domestic Resource Mobilisation in Southeast Asia
As the prospect of a COVID-19 vaccine rollout in 2021 becomes more tangible, governments are starting to shift their focus from immediate response towards recovery. A total of USD421 billion worth of COVID-19 response measures were announced by Southeast Asian economies, with Cambodia, Indonesia, Myanmar, the Philippines, and Thailand combined committing in excess of USD224 billion. Unparalleled fiscal expenditure has been coupled by a substantial reduction in the tax base, partly because of subdued economic growth and partly because of underlying public finance management issues, which have been exacerbated by the pandemic. Optimal domestic resource mobilisation (particularly tax collection and administration) will be a core enabler in the transition from emergency to recovery, as countries will need to balance fiscal sustainability concerns with the need to invest to support economic growth. This policy brief and a forthcoming report show that governments in the region can take immediate action to support their domestic resource mobilisation initiatives through three sets of responses: 1) expanding the tax base; 2) maximising tax compliance; and 3) simplifying tax compliance processes. Ten opportunities across these three areas can help governments in the focus countries strengthen their fiscal position.
Click “More” below for the Policy Brief. The full report will be published in the coming weeks.