2015 Asia Pacific Indirect Tax Country Guide

Over the next 5-10 years, the direction of indirect taxes in Asia Pacific is reasonably predictable. China will continue its Value Added Tax (“VAT”) reform program, which will eventually result in VAT being applied to all goods and services across its economy, including potentially being amongst the first countries to apply VAT to the financial services sector. Malaysia will commence its new Goods and ServicesTax (“GST”) with effect from 1 April 2015, and thereafter the debate will undoubtedly shift to increasing its rate from 6 percent. The introduction of GST in India is also now well and truly on the horizon, with previous political obstacles seemingly now removed, and a suggestion that a new GST may commence as early as 2016. Japan and Australia will continue to debate increases in their rates of indirect taxes, potentially triggering other governments in the region to follow suit.

Very shortly, VAT or GST will apply in all major economies of the world, with the exception of the United States. A staggering growth of a tax first introduced in France in 1954; applied in only 48 countries by 1989; and then expanded to over 160 countries around the world by 2015.

But what happens from 2020 and beyond? In this article we engage in crystal-ball gazing and predict two global mega trends which affect indirect taxes, and then most importantly, how each of those mega trends will impact on global developments in the use of data and analytics – more specifically, the Big Data phenomenon.