The coronavirus disease (COVID-19) pandemic exacerbated the struggles of some governments to generate tax revenue to meet public expenditure needs.

As of December 2021, close to $914 billion worth of COVID-19 response measures had been announced by Southeast Asian countries. This extraordinary fiscal expenditure has been mirrored by declines in the tax base, due to the combined effect of decreasing income and profit levels. Tax compliance has also suffered, posing significant risks to tax revenue levels, which are likely to remain subdued in the medium term.

This report provides an assessment of domestic resource mobilization in Cambodia, Indonesia, Myanmar, the Philippines, and Thailand. It shows why Southeast Asian countries need to consider fresh taxation policies after many struggled to finance massive public expenditure programs to combat COVID-19.

Contents

• Executive Summary
• Introduction
• Challenges Facing Tax Regimes in Southeast Asia
• Policies to Strengthen Domestic Resource Mobilization
• Conclusion

Published May 2022.
Source: Asian Development Bank

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