Presentation during the World Taxpayers Association (WTA) regional forum in Bangkok, Thailand. Covering GDP size of ASEAN and other countries, changes in income tax policies

1. Bienvenido “Nonoy” Oplas Jr.
Pres., Minimal Government Thinkers
Columnist, BusinessWorld
Fellow, Stratbase-ADRi
Evolution of Tax Policies in ASEAN
and Other Selected Economies
World Taxpayers Association (WTA)
Regional Meeting, Rembrandt Hotel Bangkok
December 9-10, 2017

2. I. Intro – General info
1. Population, million
ASEAN 1996 2016 Expan
Indonesia 197.0 258.7 1.3
Philippines 71.9 104.2 1.4
Vietnam 73.2 92.6 1.3
Thailand 60.1 69.0 1.1
Myanmar n/a 52.3
Malaysia 21.2 31.7 1.5
Cambodia 11.1 15.8 1.4
Laos 5.0 7.2 1.4
Singapore 3.7 5.6 1.5
Brunei 0.3 0.4 1.4
Total 443.4 637.4 1.4
Economy 1996 2016 Expan
China 1223.9 1,382.7 1.1
India 955.1 1,309.3 1.4
US 269.6 323.3 1.2
Japan 125.7 126.9 1.0
Germany 81.5 82.7 1.0
UK 58.2 65.6 1.1
Korea 45.5 51.2 1.1
Canada 29.6 36.2 1.2
Australia 18.3 24.3 1.3
Taiwan 21.5 23.5 1.1
Sweden 8.8 10.0 1.1
Hong Kong 6.5 7.4 1.1
New Zealand 3.8 4.7 1.3
Nepal 21.9 28.9 1.3
Source: IMF, World Economic Outlook April 2017, Database

3. 2. GDP Size, Nominal, $ Billion
ASEAN 1996 2016Expan
Indonesia
274.7
932.4
3.4
Thailand
183.0
406.9
2.2
Philippines 91.8 304.7
3.3
Singapore 96.4 297.0
3.1
Malaysia
108.3
296.4
2.7
Vietnam 24.7 201.3
8.2
Myanmar n/a 66.3
Cambodia 3.5 19.4
5.5
Laos 2.0 13.8
7.1
Brunei 5.7 11.2
2.0
Total
790.12,549.4 3.2
Economy 1996 2016 Expan
US 8,100.2 18,569.1 2.3
China 867.2 11,218.3 12.9
Japan 4,834.0 4,938.6 1.0
Germany 2,504.7 3,466.6 1.4
UK 1,394.5 2,629.2 1.9
India 399.8 2,256.4 5.6
Canada 628.6 1,529.2 2.4
Korea 598.1 1,411.2 2.4
Australia 425.6 1,259.0 3.0
Taiwan 292.7 528.6 1.8
Sweden 288.1 511.4 1.8
Hong Kong 159.7 320.7 2.0
New Zealand 69.1 182.0 2.6
Nepal 4.9 21.2 4.4

4. 3. GDP Size, PPP, $ Billion
ASEAN 1996 2016Expan
Indonesia 932.8 3,032.1
3.3
Thailand 437.8 1,164.9
2.7
Malaysia 245.4 863.3
3.5
Philippines 217.3 805.2
3.7
Vietnam 116.9 595.5
5.1
Singapore 126.4 492.6
3.9
Myanmar n/a 304.7
Cambodia 9.2 59.0
6.4
Laos 7.3 40.9
5.6
Brunei 19.6 32.5
1.7
Total 2,112.7 7,390.8 3.5
Economy 1996 2016 Expan
China 2,523.1 21,291.8 8.4
US 8,100.2 18,569.1 2.3
India 1,562.0 8,662.4 5.5
Japan 3,113.3 5,237.8 1.7
Germany 2,088.6 3,980.3 1.9
UK 1,278.2 2,785.6 2.2
Korea 596.7 1,934.0 3.2
Canada 712.1 1,682.4 2.4
Australia 439.5 1,187.3 2.7
Taiwan 358.7 1,132.1 3.2
Sweden 498.1 498.1 1.0
Hong Kong 154.2 429.7 2.8
New Zealand 70.1 177.0 2.5
Nepal 22.4 71.5 3.2

5. 4. Gen Govt Revenue, % of GDP
ASEAN 2016
Vietnam 23.2
Singapore 22.1
Thailand 21.9
Malaysia 20.4
Philippines 19.5
Cambodia 19.4
Laos 18.4
Brunei 17.9
Myanmar 17.3
Indonesia 14.3
Average 19.4
Economy 2016
Sweden 48.9
Germany 45.1
Canada 38.8
UK 36.3
New Zealand 34.8
Australia 34.6
Japan 32.6
US 30.9
China 28.2
Nepal 23.3
Hong Kong 23.2
Korea 22.1
India 21.3
Taiwan 15.9

6. 5. Gen Govt Gross debt, % of GDP
ASEAN 2016
Singapore 112.0
Laos 67.3
Vietnam 62.4
Malaysia 56.3
Thailand 42.2
Myanmar 35.8
Philippines 33.7
Cambodia 33.0
Indonesia 27.9
Brunei 3.1
Average 47.4
Economy 2016
Japan 239.2
US 107.4
Canada 92.3
UK 89.2
India 69.5
Germany 67.6
China 46.2
Sweden 41.7
Australia 41.1
Korea 38.6
Taiwan 35.4
New Zealand 29.5
Nepal 27.3
Hong Kong 0.1

7. Summary, in 2016:
1. Population – ASEAN with 637 M people is 3rd biggest in the world, next to
China and India. Bigger than US + EU combined.
2. GDP size nominal – ASEAN with $2,549 B is world’s 6th biggest economy,
expanded 3.2x in just 2 decades. Largest econ. is US, followed by China,
Japan, Germany, UK.
3. GDP size at purchasing power parity (PPP) values – ASEAN with $7,391 B
is world’s 4th biggest, expanded 3.5x in 2 decades. Largest is China (since
2014) followed by the US and India. Japan 5th, Indonesia 8th.
4. Gen. Government revenue as % of GDP – ASEAN average of 19.4% is small
compared to all countries in this list except Taiwan. But there should be
understatement bec revenues by local govts, state enterprises not included
there. See China, only 28.2% for a socialist economy is understated.
5. Gen. Government gross debt as % of GDP – indicator of fiscal
irresponsibility, spend-spend-spend, borrow-borrow-borrow even without crisis.
ASEAN ave. of 47.4% is midway. HK is “model” economy, almost no debt.

8. Total tax rate, % of commercial profit, 2012 Report
TTR = Profit tax + Labor tax + Other taxes by national & local govts.
Source: PWC, Paying Taxes 2012 Report

9. Total tax rate, % of commercial profit, Paying Taxes 2017 Report

10. Decline in TTR from 2012 to 2017:
1. Brunei, 16.8% to 8.7%
2. Singapore, 27.1% to 19.1%
3. Cambodia, 22.5% to 21.0%
4. Hong Kong, 23.0% to 22.9%
5. Laos, 33.3% to 26.2%
6. Nepal, 31.5% to 29.5%
7. Indonesia, 34.5% to 30.6%
8. Thailand, 37.5% to 32.6%
9. Taiwan, 35.6% to 34.5%
10.New Zealand, 34.4% to 34.3%
11.Vietnam, 40.1% to 39.4%
12.Philippines, 46.5% to 42.9%
13.Australia, 47.7% to 47.6%
14.Japan, 49.1% to 48.9%
15.India, 61.8% to 60.6%
Increase in TTR from 2012 to 2017:
1. China, 63.5% to 68.0%
2. Malaysia, 34.0% to 40.0%
3. S. Korea, 29.7% to 33.1%

11. * PH has highest total tax
rate (TTR) in ASEAN, East
Asia. Excise tax hikes (new
cars, petrol products, sugar
tax) should have been
abandoned, and 12% VAT
(highest in the ASEAN)
should be reduced to only 6-
8%, no exemption if
possible.

12. • Possible to abolish income
tax, zero, government will
still survive and prosper
via other revenue sources.
• Currently 10 countries with
zero income tax policy --
Bahamas, Bahrain,
Bermuda, Brunei, Cayman
Islands, Kuwait, Oman,
Qatar, Saudi Arabia, and
United Arab Emirates.
Their governments rely on
selling petroleum, natural
gas, lands, consumption-
based taxes.

13. Total tax rate (TTR), % of commercial profit, 2012 vs. 2017 Reports
Decline in TTR from 2012 to 2017:
1. Canada, 28.8% to 21.0%
2. UK, 37.3% to 30.9%
3. US, 46.7% TO 44.0%
4. Sweden, 52.8% to 49.1%
Increase in TTR from 2012 to 2017:
1. Spain, 38.7% to 49.0%
2. Germany, 46.7% to 48.9%

14. Number of payments in a year, 2017 Report

15. Country 1980 1990 2000 2010 2015
Spain TMITR 66 56 48 35-43 46
TMI & payroll tax rate 56 48 35-43 46
Australia TMITR 62 49 47 45 47
TMI & payroll tax rate 49 49 49 47 49
US TMITR 70-75 33-42 40-46 35-41 44-51
TMI & payroll tax rate 36-45 42-49 37-44 44-51
Canada TMITR 60-68 44-54 44-51 39-50 40-55
TMI & payroll tax rate 44-54 44-51 39-50 40-55
Japan TMITR 75 65 50 50 56
TMI & payroll tax rate 69 50 50 56
UK TMITR 83 40 40 50 45
TMI & payroll tax rate 48 48 66 64
Sweden TMITR 87 61-68 51-58 52-59 57
TMI & payroll tax rate 79-86 68-75 63-69 67
Top Marginal Income Tax Rate (TMITR), %
Fraser Institute, Economic Freedom of the World 2017 Report,
https://www.fraserinstitute.org/sites/default/files/economic-freedom-of-the-world-2017.pdf

16. Country 1980 1990 2000 2010 2015
Hong Kong TMITR 15 25 17 17 17
TMI & payroll tax rate 25 17 17 17
Malaysia TMITR 60 45 29 26 25
TMI & payroll tax rate 45 29 26 25
Philippines TMITR 70 35 32 32 32
TMI & payroll tax rate 35 32 32 32
Thailand TMITR 60 55 37 37 35
TMI & payroll tax rate 55 37 37 35
Nepal TMITR 35
TMI & payroll tax rate 35
India TMITR 60 53 30 31 35
TMI & payroll tax rate 53 30 31 35
S. Korea TMITR 89 64 44 39 42
TMI & payroll tax rate 66 44 39 46
China TMITR 45 45 45 45
TMI & payroll tax rate 45 45 45
Top Marginal Income Tax Rate (TMITR), %

17. Conclusions
• Many Asian countries started with socialistic income tax rates of 60-70% (PH, TH,
MY, IN,…), 75% (JP), even 89% (S.Kor) until 1980s. Their rates have declined
since the 90s, now at 20% – 40%+.
• But these are still high because there are economies with only 10%, 15% income
tax rates, even zero.
• ITCI as discussed by Scott Hodge (Tax Foundation), TTR as shown by PWC’s
Paying Taxes annual reports, are useful tools to perhaps shame governments with
very high total tax rates, high debt/GDP ratio.
• Beyond seemingly low tax rates are various hidden bureaucracies that make the
cost of compliance more costly. Need to hire expensive law and auditing firms to
comply properly, avoid penalties.
• Tax cut campaign should be paired with spending cut, welfarism cut campaign.