Abstract
Rapid globalization has left a profound impact on a broad spectrum of economic policies and practices in both developing and developed nations alike, as current tax systems were originally established when countries modeled their fiscal policies to focus primarily on domestic economic requirements, and international negotiations regarding tax treatments and treaties were conducted under the dominance of local tax sovereignty. However, globalization has fundamentally altered this landscape, particularly concerning tax levels, the tax mix (tax structure), and the design of specific tax types, as well as the efficiency of tax administration and taxpayer compliance. Consequently, nations have begun to exhibit increasing concern and sensitivity toward tax changes initiated by trading partners or competitors, which has progressively narrowed the margin of autonomy for domestic-focused tax policies. This shift prompted some economists, most notably Vito Tanzi (2000), to employ the term "fiscal termites" to describe the extent to which technological advancements and globalization undermine national tax systems. It is anticipated that the adaptation of tax systems to globalization will be slow, intermittent, and unstable; furthermore, as tax administrations face challenges in managing current levies, new forms of taxation may emerge alongside evolving technologies and economic activities. Therefore, this research aims to analyze the most significant effects of globalization and the consequences of increasing integration into the global economy on the tax systems of developing countries in general, and Southeast Asian countries in particular. The research is predicated on the hypothesis that there is an inverse relationship between the degree of integration of developing countries into the globalization process and their domestic tax revenues. To achieve this objective, the study is structured into three sections, each containing two subsections: the first addresses the mobility of production factors and the distribution of the tax burden therein; the second examines tax competition and the movement of foreign direct investment (FDI); and the third focuses on the communications revolution and the required tax innovation, ultimately culminating in a set of conclusions and recommendations.
DOI
10.33095/jeas.v13i45.1143
Subject Area
Economics
First Page
50
Last Page
55
Recommended Citation
Mohammed, A. H. (2007). Domestic Tax Policy in the Shade of Globalization: with Special Reference to Southeast Asian Countries. Journal of Economics and Administrative Sciences, 13(45), 50-55. https://doi.org/10.33095/jeas.v13i45.1143
