On April 10, 2011, JSAPMDD organized a roundtable discussion on tax and trade at Mesa Restaurant in Tomas Morato, Quezon City, Philippines. The discussion, which was attended by 10 participants was intended to share and generate comments and feedback on the initial findings of a JSAPMDD research on tax and trade. Atty. Golda Benjamin, who was commissioned by JSAPMDD to conduct the study led the discussion as she presented the outline of her research.
JSAPMDD Regional Coordinator Lidy Nacpil explained that the research looks at trade agreements and tax incentives across Asian countries as well as the impact of tax incentives on investments and resource mobilization and domestic revenue sources.
Golda then provided a presentation on the topics and issues that the study covers. She said that she would provide a background on the EU-ASEAN Free Trade Agreement and the status of the negotiations and then proceed to discuss why tax policies matter in a non-WTO agreement as she tackles issues from market access to market dominance. She would also look into the EU’s possible tax interests in relation to the ASEAN.
The study would discuss tax harmonization as a function of regional integration as well as the removal of export taxes, which is the main interest of the EU. There would also be a discussion on how to tax corporate income and how much corporate tax while the study compares the territorial principle which is common among EU countries and the residence principle which is used in the ASEAN countries. Golda said the study also seeks to find out whether reduction and harmonization of tax rates would create greater pressure to provide more tax incentives. Also, the research would look into Philippine excise taxes.
Lidy suggested that the study include data on estimated revenue losses for every per cent change in corporate tax rate. She also proposed that the research include the effect of tax incentives on domestic revenues and a discussion of the erosion of a country’s ability to use tax for its own interests.