At the same time, it cautioned against inflationary pressures that may lead to interest rate hikes in Asia
Led by China and India, most of the Asian economies are expected to expand this year and the next, although uncertainty over the global recovery threatens to derail growth, Moody's Analytics said on Tuesday, reports PTI.
The report underlined the need for Asia's policymakers for maintaining balance between inflation and growth.
"China will lead (growth in Asia this year), expanding around 10% followed by India and Vietnam at around 8.5%," Moody's said, adding South Korea is expected to grow around 6%, despite the deteriorating relationship with its northern neighbour.
The report further said the Association of Southeast Asian Nations (ASEAN) economies (except Thailand) are expected to grow solidly this year, following impressive first quarter results.
On Japan, it said the world's second largest economy will continue to lag, but even it has recorded better than expected growth in recent quarters, "suggesting an upgrade to the full-year forecast could be forthcoming."
Moody's said overall the economic rebound in Asia is going as planned so far and most Asian economies are expected to grow in 2010 and 2011. But, it underlined that "the sovereign default fears and uncertainty regarding the global recovery threaten to derail growth."
On the positive side, it said Asian countries' budget deficits and debt are modest compared to some European Union (EU) nations and pose few dangers to the longer term sustainability of government finances. "Hence, the immediate risk of a contagion to Asia's sovereign debt instruments is relatively small."
But, Moody's cautioned against inflationary pressures that may lead to interest rate hikes in Asia. "Inflation is re-emerging; the time frame may have been pushed out somewhat, but interest rate increases are still expected in coming months," it said, adding the policymakers will need to walk a fine line between constraining inflation and still-fragile sentiment.
Moody's also cautioned against domestic troubles that are clouding the outlook for some individual economies in the region. Thailand's first quarter growth was impressive, but recent unrest suggests momentum is all but lost. It said the chances of Thailand's gross domestic product (GDP) growing above 4% this year are rapidly diminishing.
On Australia, it said, the government appears to be making "a meal of its tax reform agenda, angering its resources industry with a proposal for higher taxes on mining profits".
While I-T overseas units are currently located in Singapore and Mauritius, the new units would be set up in US, Britain, the Netherlands, Japan, Cyprus, Germany, France and the UAE
The government has decided to set up income tax (I-T) overseas units in eight more countries, including the US and Britain, to help exchange tax-related information, reports PTI.
This is likely to be announced by finance minister Pranab Mukherjee on Wednesday at a two-day annual conference of chief commissioners and director generals of income tax, a key source said. Currently, income tax overseas units are located in Singapore and Mauritius.
The overseas units would also be established in the Netherlands, Japan, Cyprus, Germany, France and the UAE.
"The I-T overseas units would be created to streamline exchange of information with treaty partners," source added.
The conference would discuss renegotiation of double taxation avoidance agreement (DTAA) with various countries in the light of the requirement to have effective exchange of information, particularly bank-related agreements.
The government has approached 65 countries for DTAA renegotiation. With Switzerland, it has recently completed its renegotiation.
The issue of renegotiation of tax treaties assumes importance, since the matter of money allegedly stashed away by Indians in foreign banks became a scoring point in the past general elections.
The conference will also look for ways to meet the direct tax collection target of Rs4.30 lakh crore despite several concessions declared in the budget. "The collection target becomes stiff in view of relief and concessions announced in budget 2010 involving direct tax outgo of about Rs26,000 crore," an official statement said.
The budget estimates 2010-11 have pegged direct tax collections at Rs4,30,000 crore, a growth of 16.2% over the budget estimates for 2009-10. "The conference will deliberate strategies to achieve the tax collection target," the statement said.
Improving taxpayer services will be another area of concern, the department said. The income tax department has taken several steps to improve the delivery of taxpayer services by introducing schemes such as e-filing of returns and e-payment of taxes. To make the tax administration more efficient and effective, the meet will deliberate upon organisational changes including augmenting manpower and delegation of financial powers.
The conference will be held at a time when the finance ministry is likely to issue amended draft of direct taxes code soon and may address the issue of taxing long-term savings at the time of withdrawal among other matters.