I.
Introduction
A.
Background
of the Study
“In
this world nothing can be said to be certain, except death and taxes”
Benjamin
Franklin, Letter to Jean Baptiste Le Roy, 13 Nov. 1789
In its broadest sense, taxation is
the imposition by the state by virtue of its sovereignty, of a charge or burden
either on a person, property or property rights with the end in view of raising
needed revenue for the support and operation of government.[1]
In Panay Electric vs. CIR and CA
(G.R. No. L-10574 dated May 28, 1958), the Supreme Court had the occasion to
provide a conceptual definition of a tax, it goes on to state that such is a
forced charge, imposition or contribution; it operates in invitum, and is no
way dependent upon the will or contractual assent, express or implied, of the
person taxed.
Clearly, the importance of tax in
our daily lives is so profound and unavoidable. The ASEAN Economic Community
Integration, which aimed to promote free movement of goods, services,
investments and skilled labor as well as capital flows among ten ASEAN
countries, has been postponed[2]
twice due to challenges encountered in implementing some of its phases, center
of these challenges is the uncoordinated and diverse tax policies of the member
countries.
Generally, taxes are classified
into direct and indirect. Direct tax is a tax for which a taxpayer is liable on
the transaction or business it engages in, without transferring the burden to
someone else. While an indirect tax is a tax wherein the seller of goods or
services may pass the amount of tax paid to the buyer, with the seller acting
merely as tax collector. In indirect taxes, the burden of taxation falls on the
immediate buyers and ultimately, the end consumers. [3] Examples of direct taxes in the Philippines
are individual and corporate income taxes, transfer taxes and residence taxes,
while one widely known example of an indirect tax is the Value Added Tax (VAT),
also known as Goods and Services Tax in some countries.
In line with the on-going
integration of the countries of the ASEAN Region, it is but just a matter of
time that all ten ASEAN countries will adopt a uniform tax system. This fact
pattern can be observed upon the emergence of the European Economic Community
or commonly known as the European Union.
B.
Significance
of the Study
Though
not explicitly declared, it is quite convincing that the success of the
European Union success of the European Union serves as the inspiration for the
establishment of the ASEAN Economic Community. Needless to say, the blueprint and
integration activities has been patterned with the European Union Integration
Checklists.
As
far as the Author is concerned, there has been no detailed research output
outlining the similarities and difference of the EU Single VAT Law and ASEAN
countries’ business tax and VAT laws. Also, a Single VAT Law applicable to all
ASEAN countries has never been tried to be formulated.
C.
Scope
and Limitation
This
research paper will focus on analyzing the different EU VAT Directives and the
different business tax and VAT laws of ten ASEAN countries. Such analysis aimed
in identifying similarities and conflicting provisions of tax rules and
regulations to facilitate in coming up with a uniform VAT law applicable to the
entire ASEAN region.
The
social impact on the application of the ASEAN Single VAT Law to each of the
ASEAN countries will not be discussed in details. Also, this research paper
will not be discussing the effect of the change of tax policies to other type
of taxes such as corporate income tax, customs duties, withholding taxes and documentary
stamp taxes.
[1] State vs. Thorne, 87 N.W. 797
[2] http://thediplomat.com/2014/09/why-the-asean-economic-community-will-struggle/
(Last accessed on January 16, 2015)
[3] ABAKADA Guro Party List vs. The Executive
Secretary, G.R. No. 168056 dated September 1, 2005
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