Analysis of Tax Asymmetry and Potential Revenue from Wealth Tax in Indonesia, The Philippines and Vietnam

The need for a wealth tax is becoming increasingly urgent to increase state revenues and combat inequality and poverty. Growing wealth disparities and a regressive tax system, in which lower-income groups pay proportionally more, underscore the urgency. Progressive fiscal policies, including wealth taxes, are critical to reducing inequality and promoting a more equitable distribution of wealth.

This research aims to understand unequal tax systems and project potential outcomes from wealth taxes in Indonesia, the Philippines and Vietnam. These three countries were chosen because they have a sizable GDP in ASEAN, even though they represent only part of the diverse Southeast Asian landscape. Different tax structures, strategies and economic contexts in each country can yield different research insights. The significance of this research lies in highlighting the imbalance of tax systems and providing wealth tax estimates for key countries in ASEAN. The objectives include understanding tax asymmetries and estimating wealth taxes in selected countries.

This research involves policy analysis, using quantitative and qualitative methods to provide policy recommendations. Quantitative analysis measures wealth tax revenue potential, while qualitative analysis identifies tax policy weaknesses that hinder fair taxation in Indonesia, the Philippines, and Vietnam.

Implementing wealth taxes in these countries could generate additional revenue for the government, although it is unlikely to exceed the results of VAT and income taxes. Overall, this tax can reduce income inequality, complement existing taxes, especially for HNWIs who have passive income, and increase the equitable distribution of wealth through a progressive tax framework.

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