In Part 1 of this discussion, I briefly introduced the Asia Pacific Taxpayers Union (APTU) and some of its member-organizations, and the World Taxpayers Association (WTA).
I was not able to attend the APTU meeting in Bangkok last week due to financial constraints. And it was good that I did not go there because my two daughters got sick and I have to bring them to a doctor on those days that they were meeting in Bangkok.
Mr. You of Japan Taxpayers Association (JTR) sent me this group picture below.
From left, 2nd row: Ms. Gulyaim Nurbekova of Kazakhstan Taxpayers Association, Mr. You of JTR, Mr. Bjorn Tarras-Wahlberg, WTA Sec-Gen. and APTU Chairman, Mr. Fengiang Liu of Beijing International Taxation Research Society (BITRS), Mr. Raymond Ho of Momentum 107-HK, Mr. Jaya Naidu from Australia. In front is Mr. Kim SunTaek of Korea Taxpayers Association. Beside him are English translators of Mr. Kim, Mr. Liu, and... I don't know the 2 other ladies :-)
From several email exchanges where I was cc'd, it was a good meeting, good. Below is a portion of the presentation made by Bjorn.
Many countries are now competing at 10 percent flat income tax rate. Since this trend in tax competition is likely to continue, not reverse, then we should be seeing income tax rates going down to 6-7 percent or lower in some countries in the coming years.
Below is another slide from Bjorn. Georgia is stepping hard on the tax competition pedal.
Next year, Georgia's personal income tax will go down to only 7 percent and it will abolish taxes on dividends and interest income. It has also abolished capital gains tax. All other things being equal, it should be safe to assume that more and more foreign investors and professionals will be trooping to Georgia to do business there.
The governments of the Philippines and many other countries should think hard of this tax competition currently on-going. Higher taxes will either discourage businesses, or businesses will still come provided various loopholes and tax credits can be availed of. Or higher taxes will encourage government corruption, more tax cheating and avoidance, with the likely connivance of several officials and personnel of tax collection agencies themselves.