Addressing the impacts of the COVID-19 pandemic continues to challenge the fiscal management of just about all governments within the Asia and Pacific region. At same time, the surge in e-commerce that largely coincided with COV- ID-19 has greatly boosted the potential for governments to bolster tax revenues by applying Value Added Tax (VAT) more effectively to digital trade. Governments worldwide responded to the pandemic with increased public spending on a variety of response measures to bolster healthcare systems, strengthen social protection, and boost their economy. Coinciding with these increased outlays, tax revenues declined in most economies, thereby adding to growing fiscal deficits.

While some countries are witnessing signs of economic recovery and growing tax revenues, fiscal deficits remain a prominent feature of most governments' budgets and are likely to do so for some time. The Asia and Pacific region represents the largest share of global e-commerce by far and e-commerce sales continue to increase considerably. - blog.adb.org/blogs

A version of this article appears in the print on April 1, 2022, of The Himalayan Times.