Who pulled the strings?:a comparative study of Indonesian and Vietnamese tax reform

In: Heij , G 2007 , ' Who pulled the strings? a comparative study of Indonesian and Vietnamese tax reform ' , Doctor of Philosophy , University of Groningen , [S.l.] .

Abstract

Many countries overhaul their tax systems from time to time. In the Asian region countries like Indonesia, China, Malaysia, the Philippines, Singapore, Vietnam and Thailand have all undergone drastic tax reforms in the last 20 years. The need to fill the government coffers, attract foreign investment and make the tax system more equitable are among the factors instigating these tax reforms. Leading politicians, key institutions, external advisers, lobby groups and parliamentarians are just a few of the actors initiating or setting the tax reform agenda and influencing the actual reform process. But who truly pulls the strings? And how does this process work in countries with non-democratic governments? Is it different from democratic countries? Moreover, many countries have received the invited and sometimes uninvited assistance of advisers of multi- and bilateral donor agencies. The role of these foreign actors is sometimes controversial and it remains unclear what their actual influence is in these reform processes. And how does their role relate to the idea that without 'local ownership' most reform projects are doomed to fail (Allott 1980; Walle 2005, pp.65-78). The initial tax law reform may look great on paper, but without local ownership who is going to implement and adhere to the new laws? What happens once foreign advisers have gone home? So who and what truly influences these tax reform processes? That is the key question of this study. The 1980s corporate and income tax reforms in Indonesia and Vietnam are analysed to find answers to this question. The basis for the analysis is fiscal sociological theory.