Asian bank to work with China-led AIIB on infrastructure standards
HISAO KODACHI, Nikkei staff writer
The Manila-based Asian Development Bank will play a greater role in taxation in the region, its new president said.
TOKYO — The new president of the Asian Development Bank looks to focus on helping member countries improve tax collection from global tech giants.
Japan’s Masatsugu Asakawa, who took office Friday, plans to enlarge the Manila-based multilateral lender’s team of tax experts and cooperate in preventing tax avoidance.
“It’s possible for Western multinationals to generate profit in Asia, yet pay no taxes,” he told Nikkei in a recent interview.
“I intend to expand ADB’s role in international taxation and respond to base erosion and profit shifting,” Asakawa said, using a technical term for tax avoidance known as BEPS.
The bank’s new president, who played a role in setting international tax standards at the Organization for Economic Cooperation and Development, will finish the remaining term of his predecessor, Takehiko Nakao, which ends in November 2021.
In infrastructure investment, “not only scale is important, but also ensuring quality,” Asakawa told Nikkei.
Asakawa also cited infrastructure development as a challenge for the bank. The Asia-Pacific region needs an estimated $1.7 trillion in construction investment annually.
But “not only scale is important, but also ensuring quality,” he said.
At the Group of 20 summit in Osaka last summer, world leaders adopted new principles for high-quality infrastructure investment. The ADB will adhere to the standards of debt sustainability and fundraising transparency as well.
With the U.S. and Japan as its top shareholders, the ADB has kept its distance from China’s Belt and Road cross-border infrastructure initiative. But the lender will continue to engage in joint financing with the Asian Infrastructure Investment Bank, a multilateral lender led by Beijing whose members do not include Japan or the U.S.
“By working together, the AIIB will follow international standards in fundraising and environmental responsibility,” Asakawa said.
Asakawa previously served five years as the first Asian chair for the OECD’s Committee on Fiscal Affairs. The committee is the global body for setting international tax standards.
During his tenure with the committee, Asakawa led the debate on how international corporate practices should relate to taxation. After stepping down in 2016, Asakawa served as Japan’s currency czar at the Ministry of Finance.
The ADB has been led Japanese presidents throughout its history. The regional lender has 68 members, including Japan, China and the U.S.