John Christensen ■ 2015 Research Workshop: Call for Papers – Should Nation States ‘Compete’?
Call for papers for a Research Workshop
SHOULD NATION STATES ‘COMPETE’?
City University, London, 25th / 26th June 2015
The 2015 research workshop co-organised by the Association for Accountancy & Business Affairs, City University, and the Tax Justice Network, will explore the notion of national ‘competitiveness’. This opens up possibilities for papers on a wide variety of themes, including tax wars (tax ‘competition’), the dynamics of ‘beggar-thy-neighbour’ politics, regulatory degradation, regulatory arbitrage, policy responses to ‘competitiveness’ pressures, and the impact of ‘competitiveness’ policies on home countries and third party countries.
Other related themes are likely to emerge as the workshop programme develops.
Offers of papers are especially welcome and early submission of an abstract of no longer than 300 words is encouraged. All submissions will be considered by the organising committee.
This workshop will bring together researchers, academics, journalists, policy staff of civil society organisations, consultants and professionals, elected politicians and/or their researchers, and government or international organisation officials.
The purpose of the workshop is to facilitate research through open-minded debate and discussion, and to generate ideas and proposals to inform and shape the political initiatives and campaigns already under way.
There will be a small charge for attendance at the Workshop. Participants are usually expected to finance their own travel although applications from students and others with limited means for bursary support will be considered.
More information about this workshop is available from: John Christensen, Tax Justice Network, [email protected]
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Wish particpate at the workshop if possible
I am writing on behalf or our partner organisation, Action for Economic Reform, to request that they be allowed to present the draft findings of a reasearch on fiscal incentives in the ASEAN region, which they highlight not to have resulted in improved competetiveness of one coutry over another, while resulting in significant revenues foregone that could have been used for development. Paper abstract:
The call to rationalize if not reduce fiscal incentives in developing countries or emerging economies has gained ground in the past few years. Even the multilateral organizations like the World Bank (WB) and the International Monetary Fund (IMF) as well as regional development organizations like the Asian Development Bank (ADB) have taken positions that support fiscal incentives.
The rationale behind the call to rationalize fiscal incentives stems from two related facts. First, developing countries or emerging economies suffer from huge foregone revenues arising from generous fiscal incentives. This is a serious matter, taking into consideration that developing countries generally have scarce financial resources, compounded by weak tax effort, in many instances.
Second, many of the incentives turn out to be unnecessary—that these incentives are “redundant,” for even without such incentives, the investments would have been made. Redundant incentives include those in resource-seeking and market-seeking industries. Take for example the mining industry. The incentive itself is the availability of minerals to extract. An example of a market-seeking industry is telecommunication, wherein a large domestic market guarantees a high return on investments. Again, incentives are unnecessary for telecom firms to make investments.
Yet despite the strong arguments to rationalize fiscal incentives and the support of the multilateral institutions for fiscal incentive rationalization, not much progress in this area has happened. In the Philippines, for example, a bill on rationalizing fiscal incentives has been unattended in successive administrations. The present administration is attempting to push for its legislation, but internal contradictions or disagreements impede the movement of the bill.
The same situation exists in Indonesia. The previous government (a new administration has been elected in 2014) in fact provided new incentives that were enforced in 2014, but the criteria for giving the incentives remain general (e.g., being an Indonesian entity, being a “pioneering industry,” and having investments equivalent to at least US$ 100 million).
Having a rationalization of fiscal incentives in one country faces a collective action problem. One country doing it but without others following suit, disadvantages the former. The former’s tax regime becomes less competitive vis-à-vis the countries that retain the fiscal incentives. It is this context that granting fiscal incentives has contributed to the “race to the bottom.” What is necessary then is for countries, say in one region like Southeast Asia, to take collective action. That is, for countries in the region to make a credible commitment to take concerted action in rationalizing fiscal incentives.
The above serves as context for the regional research on fiscal incentives.
The objectives of the study are the following:
1. Provide a framework upon which to view fiscal incentives and define the criteria for the granting of incentives.
2. Provide an overview of the situation of fiscal incentives among the ASEAN (Association of Southeast Asian Nations) members.
3. Provide country (e.g., Philippines) and sectoral (e.g. extractives) case studies on fiscal incentives, with the selection of cases guided by the potential of promoting advocacy.
4. Serve as an important input or reference for the advocacy on rationalizing fiscal incentives, which can be conducted both at the regional and national levels.
The proposed framework proceeds from the main argument that fiscal incentives are not the drivers or predictors of investments that create better jobs and that sustain inclusive growth. Hence it must be shown at the country level (the case studies) what significant factors attract both local and foreign investments and where to situate the fiscal incentives.
The framework likewise recommends or upholds the strict criteria for the granting of fiscal incentives. It notes the prevalence of redundant incentives. But this should not be assumed, and hence an explanation of what constitutes redundant incentives (resource-seeking and market-seeking investments that have high return).
Furthermore, a first necessary step is to make fiscal incentives–including the amount, the types and features, the bases, the time horizon–transparent.
Beyond the issue of withdrawing redundant incentives, the framework paper shall likewise argue that fiscal incentives have to be tied up to industrial policy. Mainstream economists have not given much thought to this, given their fears regarding industrial policy. Yet, industrial policy has recently made a comeback in the discourse, and it is a matter of time that its link to fiscal incentives will be generally accepted. (At present, reform of fiscal incentives is geared toward export orientation, which is again too general but which excludes crucial industries that are oriented toward the domestic market.
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