REGIONAL OFFICE FOR ASIA AND THE PACIFIC (OAP)

NEWS from Asia and the Pacific

IMF leads Discussions on Curbing Corruption at Asian Tax Conference

April 25, 2019, Tokyo - As corruption has major macroeconomic implications, the IMF led discussions at an international tax conference in Tokyo on the importance of curbing corruption through good governance.

Opening the 10^th IMF-Japan High-Level Tax Conference for Asian Countries co-hosted by the IMF and Japan’s Ministry of Finance, IMF Deputy Managing Director Mitsuhiro Furusawa highlighted that corruption distorts taxpayers’ money away from public services and undercuts the government’s ability to achieve sustainable and inclusive growth. He then said that the IMF helps member countries in their fight against corruption by providing tools to diagnose weaknesses in fiscal institutions and help design necessary reforms in public finances.

“Effective tax policy and administration can help restore trust in public institutions,” he said.

The conference is a platform for tax officials from the Asia-Pacific region to discuss how they could best address various challenges in tax policy and administration and prioritize tax reforms. This year, 41 officials from 17 countries and jurisdictions joined the conference to exchange ideas on a range of issues from corruption to international taxation.

Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, kicked off the conference with a key note presentation on curbing corruption. Introducing key findings from the latest Fiscal Monitor , he said that corruption is the abuse of public office for private gain, and that there are various forms of corruption.

He then cited that the least corrupt governments collect 4% of GDP more revenues than the most corrupt governments. Although weak governance and corruption remain highly persistent, he presented two striking success stories of curbing corruption: Georgia managed to increase tax revenues from 13% to 25% of GDP with comprehensive reform of fiscal institutions and Rwanda achieved an increase from 10% to 16% of GDP based on similar reforms over the past 20 years.

“Fiscal costs associated with corruption are not small… Curbing corruption can bring large benefits,” he concluded.

The conference was first held in 2009. Since then Asian tax officials have met every year in Tokyo to discuss various challenges and deepened professional relationships with peer officials.

 

Photo: Tax officials from the Asia-Pacific region pose for a group photo before starting discussions on various challenges in tax policy and administration, including curbing corruption. (April 25, 2019; Tokyo)