*Revenue Statistics in Asia and the Pacific 2026: Taxing Informal and Hard-to-Tax Sectors* is the latest edition of the OECD's annual benchmark publication for fiscal data across the Asia-Pacific region. Produced by the OECD's Centre for Tax Policy and Administration and the OECD Development Centre, in co-operation with the Asian Development Bank (ADB), the Pacific Islands Tax Administrators Association (PITAA) and the Pacific Community (SPC), the report presents internationally comparable tax revenue statistics covering 38 economies from 1990 to 2024. Non-tax revenue data are included for 24 of those economies. This edition also contains a Special Feature examining how governments across the region can better tax the informal and hard-to-tax sectors.
The publication applies the OECD Revenue Statistics methodology, classifying taxes by base: income, profits and capital gains (heading 1000); payroll (heading 3000); property (heading 4000); goods and services (heading 5000); and other taxes (heading 6000). Compulsory social security contributions (SSCs) paid to general government are treated as taxes under heading 2000. Non-tax revenues, defined as all general government receipts that fall outside the OECD tax definition, are reported separately and include grants, property income, sales of goods and services, fines and forfeits, and miscellaneous revenues.
The full document, which contains considerably more material than is summarised here, is available for download from the OECD.
The headline: a fourth consecutive annual increase
The average tax-to-GDP ratio across the 38 economies reached 19.7% in 2024, up 0.3 percentage points (p.p.) from 2023 and above the pre-pandemic level of 19.3% recorded in 2019. The increase was the fourth in a row (0.1 p.p. in 2021, 0.8 p.p. in 2022, and 0.2 p.p. in 2023). The regional average remains well below the OECD average of 34.1% and the Latin America and the Caribbean (LAC) average of 21.7%, but above the African average of 16.1% (2023 data). Sixteen of the 38 economies had ratios above the Asia-Pacific average. All fell below the OECD average.
Tax-to-GDP ratios ranged very widely in 2024: from 6.7% in Bangladesh to 33.7% in Japan (using 2023 data for Japan, which follows an April–March fiscal year). New Zealand recorded 32.9%, Australia 29.9% (also using 2023 data) and Mongolia 29.5%.
Despite the positive regional average, the picture at the economy level was mixed. The ratio fell in 20 of the 36 economies for which 2024 data were available. In most of those cases, nominal GDP grew faster than nominal tax revenues. Only four economies recorded outright falls in nominal tax revenues in 2024: Tokelau (-12.6%), Nauru (-11.3%), Timor-Leste (-6.4%) and China (-0.5%).
Largest movers in 2024
Five economies recorded increases of 2 p.p. or more:
- Cook Islands (+5.9 p.p.) — driven by a strong rebound in tourism, which surpassed pre-pandemic levels and lifted both CIT revenues (+3.6 p.p.) and VAT (+1.3 p.p.).
- Mongolia (+4.8 p.p.) — income taxes contributed 3.1 p.p. and taxes on goods and services 1.2 p.p., supported by strong coal and copper prices and robust government and household spending.
- Marshall Islands (+4.7 p.p.) — income taxes drove around 70% of the increase, led by personal income tax (PIT) from non-residents and the Business Gross Revenue Tax; a fisheries rebound, infrastructure completions and the hosting of the Micronesian Games supported overall activity.
- Fiji (+3.6 p.p.) — a VAT reform replacing the previous three-tier system with a two-tier structure raised the rate on several goods from 9% to 15%, contributing 1.9 p.p. in VAT revenue. The CIT rate rose from 20% to 25%. Excise duties on tobacco and alcohol were also increased.
- Sri Lanka (+2.5 p.p.) — VAT revenues rose 1.8 p.p. following the removal of numerous exemptions and an increase in the standard rate from 15% to 18%.
Three economies recorded the sharpest falls:
- Niue (-3.5 p.p.) — GDP in current prices grew strongly (18.0%) as infrastructure projects and tourism recovery boosted the denominator, while nominal tax revenues grew only 5.0% and VAT from imports fell sharply.
- Nauru (-3.0 p.p.) — both GDP and tax revenues fell; Business Tax revenues declined 42.0%, largely reflecting the scaling back of the Regional Processing Centre.
- Kazakhstan (-2.1 p.p.) — flattening oil production caused an 18% fall in CIT from the oil sector, and domestic VAT and the mineral extraction tax also declined.
Other notable reform-driven changes included Lao PDR (+1.7 p.p.), where the VAT rate was restored to 10% after a temporary reduction to 7%, and Bhutan (+1.7 p.p.), where CIT from hydropower projects and state-owned enterprises rose and a moratorium on vehicle imports was lifted.
Ten-year perspective (2014–2024)
Over the decade, the ratio increased in 23 of the 38 economies and fell in 15. The largest ten-year gains were in Mongolia (+9.3 p.p.), the Cook Islands (+8.8 p.p.), Kiribati (+7.0 p.p.), the Maldives (+6.9 p.p.), Nauru (+6.5 p.p.) and the Marshall Islands (+6.0 p.p.). The biggest long-term falls were in Timor-Leste (-10.0 p.p., driven by declining oil and gas production), China (-5.2 p.p. excluding SSCs, partly reflecting the 2016 replacement of the Business Tax with VAT), Kazakhstan (-3.6 p.p.) and Malaysia and Papua New Guinea (both -2.3 p.p.).
PIT and VAT were the main drivers of regional revenue growth over the decade, each increasing by 0.6 p.p. of GDP on average since 2019. Revenue from other taxes on goods and services declined by 0.5 p.p. as trade liberalisation, including the progressive implementation of the Regional Comprehensive Economic Partnership from 2022, reduced customs revenues, and energy-related support measures introduced during the 2022 inflation surge temporarily compressed excise collections.
Chapter 1: Tax structures
Taxes on goods and services remain the principal revenue source for 26 of the 38 economies, representing 50% of total taxation on average. VAT accounts for the largest share of goods-and-services revenues in 18 of those 26 economies, ranging from 24.7% of total tax revenues in Viet Nam to 56.8% in Vanuatu.
Income taxes have grown in importance. PIT and CIT now account for 18.2% and 19.9% of total tax revenues on average respectively, reflecting stronger labour markets and rising commodity-sector profits in some economies. In ten economies, income and profits taxes represent the largest share of total revenues, ranging from 31.2% in Korea to 67.6% in Tokelau. SSCs remain relatively modest at 8.4% of total revenues on average, though they dominate in the Marshall Islands (40.2%), Japan (39.1%), China (33.5%), Viet Nam (30.0%) and Korea (30.2%).
Compared with other regional groupings, Asia-Pacific relies more heavily on goods-and-services taxes than OECD countries (50.0% vs 31.2% of total revenues) but less on SSCs (8.4% vs 25.5%). CIT generates a comparatively high share of revenues in the region (19.9% of total tax), second only to Africa (21.4%).
VAT efficiency
The publication examines VAT revenue ratios (VRRs) for 2023. The highest VRR in the region was the Cook Islands at 1.08, inflated by tourist-VAT collections not matched by tourist spending in the final consumption expenditure denominator. The lowest was Timor-Leste at 0.07. Of 28 economies with available data, 17 had VRRs above the OECD average of 0.58. The analysis confirms that VAT performance correlates more strongly with policy design and administration — base breadth, registration coverage and compliance — than with the level of the standard rate. Australia, New Zealand and Singapore have extended VAT to inbound digital supplies, and others including several Central Asian economies have followed since 2020.
Sub-regions
East Asia (24.3%), the Pacific (22.9%) and West and Central Asia (22.0%) all exceeded the 19.7% regional average in 2024. Southeast Asia (14.0%) and South Asia (14.2%) remained below it. Between 2023 and 2024, South Asia recorded the largest increase (+1.2 p.p.), primarily through higher VAT. West and Central Asia was the only sub-region to record a decline (-0.3 p.p.), driven by weaker VAT and CIT linked to falling commodity revenues.
East Asia's tax structure is relatively diversified, with CIT, SSCs and VAT each accounting for roughly 20–25% of revenues. South Asia relies heavily on goods-and-services taxes, with PIT and SSCs combined representing under 10% of revenues, well below the regional average of 26.5%.
Income groups
High-income economies (Australia, Hong Kong (China), Japan, Korea, Nauru, New Zealand and Singapore under the World Bank classification) averaged a tax-to-GDP ratio of 23.4% but recorded a decline of 0.7 p.p. in 2024, driven by lower PIT and CIT. Upper middle-income economies averaged 21.4% and rose 0.7 p.p., led by PIT. Lower middle-income economies averaged 15.0% and rose 0.6 p.p., mainly through VAT.
High-income economies rely significantly more on income and profits taxes (close to 50% of revenues, with PIT at 27.3%) than either middle-income group, where goods-and-services taxes dominate.
Environmental taxes
For 27 economies with available data, environmentally related tax revenue (ERTR) as a share of GDP ranged from 0.003% in Papua New Guinea to 2.1% in the Solomon Islands, averaging 0.8% of GDP in 2024. The Solomon Islands' elevated ERTR reflects timber export duties. Transport taxes, energy taxes and resource taxes each contribute roughly equal shares of ERTR in Asia-Pacific (36.1%, 32.8% and 29.4% respectively), in contrast to other regions where energy taxes dominate. The report notes that the under-use of environmental taxation must be understood alongside the extensive use of fossil fuel subsidies, and that reforming those subsidies while simultaneously expanding environmental levies could mobilise significant revenues and support the Sustainable Development Goals.
Non-tax revenues
Non-tax revenues averaged 22.3% of GDP in 2024 across the 24 reporting economies, but the figure is heavily skewed by a small group of Pacific Island economies. Tokelau recorded non-tax revenues of 171.9% of GDP, Niue 127.0%, Nauru 68.4% and the Marshall Islands 53.3%. For those four economies, external grants and revenues from fishing licences and vessel day schemes (VDS) well exceed tax revenues. Excluding them, the average falls to 5.7% of GDP.
Grant revenues declined on average by 3.4 p.p. in 2024. Property income dominates non-tax revenues in Kazakhstan (oil royalties), Mongolia (mining royalties), the Maldives (tourism resort leases) and Lao PDR (hydropower). In Hong Kong (China), land premium revenues — the main non-tax source historically — stood at roughly 10% of their 2019 level in 2024, reflecting a sluggish property market.
Pacific Island economies have been increasing fisheries-related revenues through the Parties to the Nauru Agreement's VDS. PNA member economies now jointly collect around USD 500 million annually from tuna fisheries, approximately seven times more than in 2010.
Special Feature: taxing informal and hard-to-tax sectors
The Special Feature addresses one of the central structural challenges for domestic resource mobilisation in the region. Informal employment accounted for more than 53% of non-agricultural employment in Asia and the Pacific in 2019. Informality is not binary: the report distinguishes activities by their formality status and their tax compliance status, noting that some formally registered businesses under-report income while some informal operators pay certain indirect taxes.
Tax administrations are advised to focus compliance effort on taxpayers with the greatest revenue potential, rather than on a simple formal–informal distinction. The Special Feature surveys strategies including expansion of taxpayer registration, reductions in tax rates and the introduction of presumptive tax regimes, and concludes that all have produced mixed results across the region. Broad measures applied uniformly tend to underperform; effective strategies must be country-specific and targeted.
VAT is examined in the context of informality. The invoice-chain self-enforcement mechanism offers advantages in drawing businesses into the system, but informal firms transacting primarily in cash or with final consumers face weaker incentives to register, since the value of input tax credits is limited for them.
The full text of this chapter contains detailed estimates of informal sector size and revenue potential, and a more extensive treatment of administrative strategies. The document extract available for this summary is truncated; the complete publication contains further material here as well as in Chapters 3 to 5 and the interpretative annexes.
Why this matters for practitioners
Several points stand out for tax advisers.
The divergence between the positive regional headline and the deterioration in 20 individual economies underlines the risk of reading aggregate trends uncritically. Clients with operations across multiple Asia-Pacific jurisdictions need economy-level analysis.
The reform experiences documented here offer clear comparative material. Sri Lanka's VAT base-broadening and rate increase, Fiji's rate restructuring, Mongolia's progressive PIT reform and Lao PDR's VAT rate restoration all illustrate how policy design choices translate — or fail to translate — into revenue outcomes. The VRR analysis reinforces that base broadening outperforms rate increases as a VAT revenue strategy.
The Special Feature's emphasis on country-specific compliance strategies matters for advisers working with governments on domestic resource mobilisation. The inconsistent record of presumptive tax regimes and registration drives suggests that administrative capacity and policy sequencing are at least as important as formal policy design.
Finally, the structural shift away from customs duties — driven by the Regional Comprehensive Economic Partnership and other trade liberalisation — and towards PIT and CIT signals a changing landscape for cross-border investment taxation and transfer pricing across the region.