The Association of Southeast Asian Nations (ASEAN) has noted “substantial progress” in the discussions on the regional taxation agreements among member countries of the 10-nation bloc, inching it closer to the goal of strengthening cooperation on tax matters to further support its move towards a unified economic community, according to the Department of Finance (DOF).

The Philippines chairs the ASEAN Forum on Taxation-Working Group (AFT-WG) from 2018 to 2019 and conducted the second working group meeting last Oct. 24-25 in Panglao, Bohol.

All of the ASEAN member-states, except for Malaysia, were represented in the meeting. The event gathered around 50 participants, 40 of whom were foreign delegates, including members of the ASEAN secretariat and the speaker from the Organisation for Economic Co-operation and Development (OECD).

In a recent DOF Executive Committee (Execom) meeting, the Domestic Finance Group (DFG) reported to Secretary Carlos Dominguez III that “substantial progress” has been achieved in the regional discussions as it noted the initiatives thus far completed and endorsed by the AFT-WG.

Undersecretary Gil Beltran said these initiatives include a strategic action plan and a set of annual priorities to move ahead on harmonizing the withholding tax rates among the ASEAN member-states and the exchange of information and training program for tax policy and administration in the region.

Beltran, who is also the DOF’s chief economist, told Dominguez that the Kookmin Institute of South Korea offered to host and shoulder the costs of the training program.
Southeast Asia is one of the fastest-growing regional blocs in the world. Intra-ASEAN trade and investments have been on the rise in the past few years, fueled by the goal of its member-states to create an integrated regional market through the Asean Economic Community.
Member-states also seek to lower regional barriers to trade and harmonize rules and standards to further expand intra-ASEAN trade and investments.
Upon the endorsement of the ASEAN finance ministers, the AFT was formed in 2011 in Indonesia to provide the organization a platform to support a dialogue on taxation issues for regional integration, particularly on concerns related to withholding tax and double taxation.
Beltran said the next meeting of the AFT-WG is tentatively set in March 2018, the agenda of which include the presentation of initial results by the global firm Deloitte on the proposed study on the withholding tax structure in the ASEAN for comments and/or refinements. The UK-based Deloitte is considered a global leader in audit, accountancy and financial advisory services.
Also expected to be discussed in the March 2018 meeting are ASEAN members’ assessment of the training by the Kookmin Institute of South Korea, and the progress on the completion of the double taxation agreements, Beltran said.