Bulletin n. 2/2010
October 2010
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Dennis Botmana; Alexander Klemmb; Reza Baqir
    Investment incentives and effective tax rates in the Philippines: a comparison with neighboring countries
    in Journal of the Asia Pacific Economy (The) , Volume 15 Issue 2 ,  2010 ,  166 - 191
    This paper compares the general tax provisions and investment incentives in the Philippines to six other East Asian economies - Malaysia, Indonesia, Lao, Vietnam, Cambodia and Thailand. It finds that general effective tax rates are relatively high in the Philippines, while investment incentives are comparable to those in neighboring countries. Tax holidays are most attractive for very profitable firms, creating redundancy, and for investment in short-lived assets. Two recently proposed tax reforms would replace tax holidays by a reduced corporate income tax rate or a low tax on gross receipts. The results suggest that this would result in stronger incentives to invest, while government revenue would increase. Alternatively, replacing tax holidays with a general reduction in the corporate tax rate and accelerated depreciation would either not provide the same incentives or be very costly.
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