The paper presents a survey of value-added tax (VAT) and taxes with VAT-like structure of ASEAN countries.
Among the ten (10) member-countries of the ASEAN, six (6) countries are imposing the VAT, namely, Philippines, Cambodia, Lao PDR, Thailand, Vietnam and Indonesia while three (3) countries are imposing tax with VAT-like structure namely the Goods and Services Tax (GST) of Singapore, Sales Tax and Services Tax of Malaysia and Commercial Tax of Myanmar. Brunei, on the other hand, has no VAT or equivalent consumption tax. Of the 6 countries imposing the VAT, five (5) impose a single VAT rate on the sale of goods and services. The Philippines imposes the highest VAT rate of 12%, Cambodia, Indonesia and Lao PDR, 10% and Thailand, the lowest rate of 7%. Vietnam, on the other hand, has two-tiered VAT rates. Singapore collects a GST with a rate of 7%; Malaysia, a service tax of 6% and a sales tax of 5% and 10%; Myanmar, a commercial tax with rates ranging from 5% to 100%.
The VAT and other forms of business taxes are imposed on taxable goods and services except those specifically exempt from the tax and those subject to zero rate (0%). In the Philippines, the types of services subject to VAT are specifically enumerated (23 categories) while other countries use generic provisions which subject to the tax all types of goods and services except those specifically listed as exempt or subject to zero rate.
The tax base for purposes of VAT calculation generally is gross selling price for taxable goods and gross receipts for taxable services. With regard to importation, the tax base is the dutiable value plus import duty and other charges and fees. In addition, VAT/GST can only be levied and charged if the business is registered under the system.
VAT-imposing countries generally deduct VAT inputs on business-related transactions against their VAT outputs. The use of tax credits has been an essential part of the VAT system as well as the taxes with VAT-like structure as the tax is levied only on the “value-added” in each stage of the production/distribution chain.
Common to all ASEAN countries is the zero-rated transactions for export of goods and certain types of specific services to avoid taxing the products/services twice. It is noted that in Malaysia, exports of goods are exempt instead of being zero rated.
With regard to exempt transactions, common to most ASEAN countries are the sale and importation of agricultural and marine food products in their original state. The Philippines, Cambodia, Lao PDR and Thailand specifically listed importation of personal and household effects as exempt from VAT. In addition, Philippines, Lao PDR, Thailand, Vietnam, Malaysia, Indonesia and Myanmar include sale, importation, printing or publication of books in their list of exempt transactions. Lastly, the reciprocity principle between countries is applied in the Philippines, Cambodia and Lao PDR.
