Building Resilience in Asia by Spending Better and Raising More Revenue

Opening Remarks by Deputy Managing Director Okamura at the Fourteenth IMF-Japan High-Level Tax Conference for Asian Countries
Tokyo, Japan

September 24, 2025

Good morning. It is my great pleasure to welcome you to the fourteenth IMF-Japan High-Level Tax Conference for Asian Countries.

I would like to thank the Japanese Ministry of Finance for co-hosting this event, and the government of Japan for their generous support. I am also grateful to my colleagues in the IMF's Fiscal Affairs Department and the Regional Office for Asia and the Pacific for their help organizing this annual event.

First, let me say a few words about our global outlook. The global economy has so far proven to be resilient in the face of higher tariffs and other major policy shifts. This resilience, however, is largely due to temporary factors, not fundamental economic strength, and there are now signs of a slowdown.

Slower growth could amplify debt risks at a time when debt levels are already high. At the same time, spending pressures are intensifying from defense needs, and demographic and technological changes. In developing countries, financing needs for development remain large with cuts in aid flows.

Against this backdrop, Asia's near-term growth has held up amid trade tensions. But the region's successful growth model based on trade liberalization and integration into value chains faces mounting challenges. Many countries are struggling with high interest costs and refinancing needs that limit their ability to finance critical development spending and build resilience.

In today's constrained fiscal environment, governments will need to deliver greater value for money. One way to achieve this is by improving the efficiency of public spending.

While many countries have made progress since the 1980s, significant efficiency gaps remain. Governments can do more to sharpen their prioritization by channeling spending to growth areas, like public investment and education. The forthcoming Fiscal Monitor at the Annual Meetings will provide new insights into how stronger institutional frameworks and improvements in spending composition can enhance growth.

Domestic revenue mobilization is also critical and can be achieved through fair and competitive taxation.

Our forthcoming research shows there is a tipping point for the tax-to-GDP ratio. Countries need to target at least 15 percent of tax-to-GDP before economic growth increases, and government effectiveness and financial development improve. Below that, governments suffer from lack of state capacity to manage their economies and provide adequate public services.

At our conference this week, we will discuss several issues that are critical to effective revenue generation, including the design and administration of value-added tax and the role of AI. We will also discuss recent developments in international taxation and tax incentives, as well as applications of the medium-term revenue strategies framework based on early adopters in the region. There will also be a special session on property taxes in Asia.

The best part of this conference is that it is a peer-to-peer event. The exchange of experience provides a great opportunity to learn about successes and failures, and to build a professional network that fosters collaboration among policymakers. This is tremendously valuable to the IMF, as we share this knowledge with other countries in the world.

In Asia, the IMF offers hands-on support to countries through our regional centers in Fiji, Thailand, India, China, and Singapore. And here in Tokyo we have the Regional Office for Asia and the Pacific, which helps promote peer-to-peer learning in the region by organizing events such as this one.

The IMF is here to help countries navigate the fiscal challenges ahead through tailored policy advice and capacity development. Working together, we can help our members improve tax policies, public spending, and revenue administration-all critical to rebuilding buffers and investing in our futures.

Thank you.