The Effectiveness of Tax Incentives on Foreign Direct Investment in ASEAN Countries

Ferry Irawan, . (2013) The Effectiveness of Tax Incentives on Foreign Direct Investment in ASEAN Countries. Jurnal Ilmiah Akuntansi Universitas Pamulang, 1 (1). pp. 1-15. ISSN 2339-0867

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Abstract

This paper evaluates two empirical questions about tax incentives: (a) are tax incentives effective in attracting foreign direct investment in ASEAN countries, and (b) are tax incentives effective in attracting investment from prime home countries’ perspective: Japan, Korea, and United States of America. To answer these questions, the study prepared a data set of tax incentives in over six host ASEAN countries: Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam for the period 2000 – 2010. Using random effect method, it is found that lower corporate tax rates can attract foreign investment. Meanwhile, from the home countries’ perspective it provides different result. For Japanese investors, lower corporate tax rates and longer tax holiday can encourage them to invest more. Meanwhile, for Korean investors although tax rate and tax holiday have positive relation but they are insignificant. US investors consider about the corporate tax rate but they choose not to pay attention for tax holidays. Keywords : Effectiveness, Tax Incentives, Foreign Direct Investment

Item Type: Article
Subjects: H Social Sciences > HC Economic History and Conditions
Depositing User: Admin Perpustakaan UNPAM
Date Deposited: 10 Sep 2015 08:16
Last Modified: 06 Jan 2017 07:10
URI: http://eprints.unpam.ac.id/id/eprint/414

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