Excise Taxation in ASEAN

An Analysis of the Need to Develop a Coordinated Approach to Excise Tax Policy as Part of Implementing the ASEAN Economic Community

Research output: ThesisDoctoral Thesis

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Abstract

Excise taxation plays a significant role in the economies of each of the member countries of the Association of South East Asian Nations (ASEAN) in terms of both revenue and consumption policies. However, each member country has seemingly developed their excise taxation policies in isolation and the result being quite marked differences in terms of both what goods and services are subject to excise and how excise tax is then levied. As ASEAN looks to achieve closer economic integration, it is timely to analyse whether these differences in excise taxation have any impact on this objective of bringing the 10 economies closer together.
The official formation of the ASEAN Economic Community (AEC) from 31 December 2015 represented a significant milestone towards this deeper economic integration and has at its foundation the desire to create a ‘single market and production base’ with a ‘free flow of goods and services’. Whilst ASEAN through the AEC will not be moving to an open border style economic community, customs tariffs on most lines of intra-regional trade are now at ‘zero’, however domestic taxes levied on imported goods such as excise are still applied and in some cases are structured in such a way that they potentially operate as a barrier to trade. Conversely, certain sensitive goods commonly subject to excise such as alcoholic beverages and tobacco products, could benefit markedly from zero tariffs and without an appropriate excise tax policy response, risk entering various markets at prices below that desired by national consumption objectives.
The current blueprint supporting the implementation of the AEC through to 2025 has both identified the need and has sought member countries to explore a level of coordination, albeit at a minimal level, over those goods commonly subject to excise tax. This study supports this exploration of possible excise tax coordination, and undertakes an analysis of the current national excise taxation policies across ASEAN and highlights the effect of these policy differentials. The study has a focus on automobiles, alcoholic beverages and tobacco products which represent the three products taxed in all member countries, but also addresses a range of other goods which are taxed, or will be taxed in most member countries.
The study also explores the notion of excise tax policy coordination and reviews approaches to the issue from a number of other economic communities, and brings together a number of options for consideration by ASEAN. Building on the success of existing coordinating instruments such as the ASEAN Harmonised Tariff Nomenclature, the study proposes the development of an ASEAN Common Excise Working Tariff to introduce a level of standardised excise product categories, product definitions and tax bases, but leaving member countries with a degree of flexibility to capture national economic considerations in terms of rate setting and statistical reporting. The consensus of such an instrument and its implementation is intended to start to align national excise tax policies for a regional outcome that preserves revenue levels, supports investment in key excise paying industries by ensuring trade across the region, and does not undermine consumption policies for products such as alcohol and tobacco.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Charles Sturt University
Supervisors/Advisors
  • Widdowson, David, Principal Supervisor
Award date15 May 2018
Publisher
Publication statusPublished - 15 May 2018

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Tax policy
Taxation
Economics
Asia
Excise tax
Tariffs
Tobacco
Economic integration
Alcoholic beverages
Revenue
Tax coordination
Policy coordination
Isolation
Alcohol
Single market
Industry
Product category
Policy responses
Tax
Tax base

Cite this

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title = "Excise Taxation in ASEAN: An Analysis of the Need to Develop a Coordinated Approach to Excise Tax Policy as Part of Implementing the ASEAN Economic Community",
abstract = "Excise taxation plays a significant role in the economies of each of the member countries of the Association of South East Asian Nations (ASEAN) in terms of both revenue and consumption policies. However, each member country has seemingly developed their excise taxation policies in isolation and the result being quite marked differences in terms of both what goods and services are subject to excise and how excise tax is then levied. As ASEAN looks to achieve closer economic integration, it is timely to analyse whether these differences in excise taxation have any impact on this objective of bringing the 10 economies closer together.The official formation of the ASEAN Economic Community (AEC) from 31 December 2015 represented a significant milestone towards this deeper economic integration and has at its foundation the desire to create a ‘single market and production base’ with a ‘free flow of goods and services’. Whilst ASEAN through the AEC will not be moving to an open border style economic community, customs tariffs on most lines of intra-regional trade are now at ‘zero’, however domestic taxes levied on imported goods such as excise are still applied and in some cases are structured in such a way that they potentially operate as a barrier to trade. Conversely, certain sensitive goods commonly subject to excise such as alcoholic beverages and tobacco products, could benefit markedly from zero tariffs and without an appropriate excise tax policy response, risk entering various markets at prices below that desired by national consumption objectives.The current blueprint supporting the implementation of the AEC through to 2025 has both identified the need and has sought member countries to explore a level of coordination, albeit at a minimal level, over those goods commonly subject to excise tax. This study supports this exploration of possible excise tax coordination, and undertakes an analysis of the current national excise taxation policies across ASEAN and highlights the effect of these policy differentials. The study has a focus on automobiles, alcoholic beverages and tobacco products which represent the three products taxed in all member countries, but also addresses a range of other goods which are taxed, or will be taxed in most member countries.The study also explores the notion of excise tax policy coordination and reviews approaches to the issue from a number of other economic communities, and brings together a number of options for consideration by ASEAN. Building on the success of existing coordinating instruments such as the ASEAN Harmonised Tariff Nomenclature, the study proposes the development of an ASEAN Common Excise Working Tariff to introduce a level of standardised excise product categories, product definitions and tax bases, but leaving member countries with a degree of flexibility to capture national economic considerations in terms of rate setting and statistical reporting. The consensus of such an instrument and its implementation is intended to start to align national excise tax policies for a regional outcome that preserves revenue levels, supports investment in key excise paying industries by ensuring trade across the region, and does not undermine consumption policies for products such as alcohol and tobacco.",
author = "Robert Preece",
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T2 - An Analysis of the Need to Develop a Coordinated Approach to Excise Tax Policy as Part of Implementing the ASEAN Economic Community

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N2 - Excise taxation plays a significant role in the economies of each of the member countries of the Association of South East Asian Nations (ASEAN) in terms of both revenue and consumption policies. However, each member country has seemingly developed their excise taxation policies in isolation and the result being quite marked differences in terms of both what goods and services are subject to excise and how excise tax is then levied. As ASEAN looks to achieve closer economic integration, it is timely to analyse whether these differences in excise taxation have any impact on this objective of bringing the 10 economies closer together.The official formation of the ASEAN Economic Community (AEC) from 31 December 2015 represented a significant milestone towards this deeper economic integration and has at its foundation the desire to create a ‘single market and production base’ with a ‘free flow of goods and services’. Whilst ASEAN through the AEC will not be moving to an open border style economic community, customs tariffs on most lines of intra-regional trade are now at ‘zero’, however domestic taxes levied on imported goods such as excise are still applied and in some cases are structured in such a way that they potentially operate as a barrier to trade. Conversely, certain sensitive goods commonly subject to excise such as alcoholic beverages and tobacco products, could benefit markedly from zero tariffs and without an appropriate excise tax policy response, risk entering various markets at prices below that desired by national consumption objectives.The current blueprint supporting the implementation of the AEC through to 2025 has both identified the need and has sought member countries to explore a level of coordination, albeit at a minimal level, over those goods commonly subject to excise tax. This study supports this exploration of possible excise tax coordination, and undertakes an analysis of the current national excise taxation policies across ASEAN and highlights the effect of these policy differentials. The study has a focus on automobiles, alcoholic beverages and tobacco products which represent the three products taxed in all member countries, but also addresses a range of other goods which are taxed, or will be taxed in most member countries.The study also explores the notion of excise tax policy coordination and reviews approaches to the issue from a number of other economic communities, and brings together a number of options for consideration by ASEAN. Building on the success of existing coordinating instruments such as the ASEAN Harmonised Tariff Nomenclature, the study proposes the development of an ASEAN Common Excise Working Tariff to introduce a level of standardised excise product categories, product definitions and tax bases, but leaving member countries with a degree of flexibility to capture national economic considerations in terms of rate setting and statistical reporting. The consensus of such an instrument and its implementation is intended to start to align national excise tax policies for a regional outcome that preserves revenue levels, supports investment in key excise paying industries by ensuring trade across the region, and does not undermine consumption policies for products such as alcohol and tobacco.

AB - Excise taxation plays a significant role in the economies of each of the member countries of the Association of South East Asian Nations (ASEAN) in terms of both revenue and consumption policies. However, each member country has seemingly developed their excise taxation policies in isolation and the result being quite marked differences in terms of both what goods and services are subject to excise and how excise tax is then levied. As ASEAN looks to achieve closer economic integration, it is timely to analyse whether these differences in excise taxation have any impact on this objective of bringing the 10 economies closer together.The official formation of the ASEAN Economic Community (AEC) from 31 December 2015 represented a significant milestone towards this deeper economic integration and has at its foundation the desire to create a ‘single market and production base’ with a ‘free flow of goods and services’. Whilst ASEAN through the AEC will not be moving to an open border style economic community, customs tariffs on most lines of intra-regional trade are now at ‘zero’, however domestic taxes levied on imported goods such as excise are still applied and in some cases are structured in such a way that they potentially operate as a barrier to trade. Conversely, certain sensitive goods commonly subject to excise such as alcoholic beverages and tobacco products, could benefit markedly from zero tariffs and without an appropriate excise tax policy response, risk entering various markets at prices below that desired by national consumption objectives.The current blueprint supporting the implementation of the AEC through to 2025 has both identified the need and has sought member countries to explore a level of coordination, albeit at a minimal level, over those goods commonly subject to excise tax. This study supports this exploration of possible excise tax coordination, and undertakes an analysis of the current national excise taxation policies across ASEAN and highlights the effect of these policy differentials. The study has a focus on automobiles, alcoholic beverages and tobacco products which represent the three products taxed in all member countries, but also addresses a range of other goods which are taxed, or will be taxed in most member countries.The study also explores the notion of excise tax policy coordination and reviews approaches to the issue from a number of other economic communities, and brings together a number of options for consideration by ASEAN. Building on the success of existing coordinating instruments such as the ASEAN Harmonised Tariff Nomenclature, the study proposes the development of an ASEAN Common Excise Working Tariff to introduce a level of standardised excise product categories, product definitions and tax bases, but leaving member countries with a degree of flexibility to capture national economic considerations in terms of rate setting and statistical reporting. The consensus of such an instrument and its implementation is intended to start to align national excise tax policies for a regional outcome that preserves revenue levels, supports investment in key excise paying industries by ensuring trade across the region, and does not undermine consumption policies for products such as alcohol and tobacco.

M3 - Doctoral Thesis

PB - Charles Sturt Unversity

ER -