{ "title": "Tax Policy and the Asian Crisis", "publication": "IMF Policy Discussion Papers, February 1, 1999", "sourceUrl": "https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889", "canonical": "https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889", "overlayPath": "/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/index.md", "summary": "This paper focuses on tax policy and the crisis in Asia in the context of globalization and technological change. Two sets of conclusions, specific tax reform measures and general lessons from the crisis, form the tax policy agenda on these issues.", "sections": [ { "heading": "Summary", "content": "- Focus: tax policy and the crisis in Asia in the context of globalization and technological change.\n- Two sets of conclusions form the tax policy agenda:\n - specific tax reform measures, and\n - general lessons from the crisis.\n- Key observation: the complexity and volume of financial transactions, associated with the opening of emerging markets, have made tax administration a more challenging task.\n- Analogy: just as strengthening financial systems must be a precursor to capital account liberalization, tax administrations clearly also require strengthening in such an environment.\n- Constraint noted: in many emerging markets the capacity to tax capital returns is limited.\n- Required capability: tax administrators need to understand and monitor complex financial transactions that grew rapidly due both to financial sector liberalization and technological innovation.\n- Expanded scope of traditional challenges: transfer pricing, once often limited to natural resource sectors, took on wider importance as local companies gained sophistication and developed offshore operations." }, { "heading": "Major findings and conclusions", "content": "- Specific tax reform measures and general lessons from the crisis together constitute the recommended tax policy agenda.\n- The rapid growth in the complexity and volume of financial transactions increased challenges for revenue administration.\n- Strengthening tax administration is a necessary complement to financial system strengthening prior to capital account liberalization.\n- Limited capacity to tax capital returns in many emerging markets undermines revenue mobilization in liberalizing economies.\n- Transfer pricing and other traditional tax administration difficulties became more widespread beyond resource sectors as corporate structures and offshore activities evolved." }, { "heading": "Challenges for tax administration highlighted", "content": "- Monitoring and understanding complex financial transactions driven by:\n - financial sector liberalization, and\n - technological innovation.\n- Addressing transfer pricing issues as they expand in scope with corporate sophistication and offshore operations.\n- Constraining the limited ability to tax capital returns in many emerging markets." }, { "heading": "Policy implications and agenda", "content": "- Prioritize strengthening tax administrations in tandem with financial system reforms ahead of capital account liberalization.\n- Enhance capacity to tax capital returns in emerging markets.\n- Build expertise within tax administrations to detect, monitor, and tax complex financial transactions and transfer-pricing arrangements.\n- Recognize that globalization and technological change require updated administrative capabilities and oversight.\n\n---\n\n Content in this bundle\n\n- Tax Policy and the Asian Crisis - PDP/99/2\n - Tax Policy and the Asian Crisis - PDP/99/2 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Tax Policy and the Asian Crisis - PDP/99/2 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889" } ], "bullets": [ "[Markdown version](/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/index.md)", "[Structured JSON version](/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/index.json)", "[Bundle manifest](/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/bundle-manifest.json)", "Authors: David C Nellor", "Published: February 1, 1999", "Series: IMF Policy Discussion Papers", "DOI: https://doi.org/10.5089/9781451974454.003", "Focus: tax policy and the crisis in Asia in the context of globalization and technological change.", "Two sets of conclusions form the tax policy agenda:", "Key observation: the complexity and volume of financial transactions, associated with the opening of emerging markets, have made tax administration a more challenging task.", "Analogy: just as strengthening financial systems must be a precursor to capital account liberalization, tax administrations clearly also require strengthening in such an environment.", "Constraint noted: in many emerging markets the capacity to tax capital returns is limited.", "Required capability: tax administrators need to understand and monitor complex financial transactions that grew rapidly due both to financial sector liberalization and technological innovation.", "Expanded scope of traditional challenges: transfer pricing, once often limited to natural resource sectors, took on wider importance as local companies gained sophistication and developed offshore operations.", "Specific tax reform measures and general lessons from the crisis together constitute the recommended tax policy agenda.", "The rapid growth in the complexity and volume of financial transactions increased challenges for revenue administration.", "Strengthening tax administration is a necessary complement to financial system strengthening prior to capital account liberalization.", "Limited capacity to tax capital returns in many emerging markets undermines revenue mobilization in liberalizing economies.", "Transfer pricing and other traditional tax administration difficulties became more widespread beyond resource sectors as corporate structures and offshore activities evolved.", "Monitoring and understanding complex financial transactions driven by:", "Addressing transfer pricing issues as they expand in scope with corporate sophistication and offshore operations.", "Constraining the limited ability to tax capital returns in many emerging markets.", "Prioritize strengthening tax administrations in tandem with financial system reforms ahead of capital account liberalization.", "Enhance capacity to tax capital returns in emerging markets.", "Build expertise within tax administrations to detect, monitor, and tax complex financial transactions and transfer-pricing arrangements.", "Recognize that globalization and technological change require updated administrative capabilities and oversight.", "**Tax Policy and the Asian Crisis - PDP/99/2**" ], "related": [ { "title": "Tax Policy and the Asian Crisis - PDP/99/2", "role": "document", "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/pdp/1999/_pdp02.pdf", "summary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/pdp/1999/_pdp02.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/pdp/1999/_pdp02.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/index.md", "json": "/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/index.json", "bundleManifest": "/en/publications/imf-policy-discussion-papers/issues/2016/12/30/tax-policy-and-the-asian-crisis-2889/bundle-manifest.json" }, "generatedAtUtc": "2026-09-20T18:22:19.892Z" }