Tax Justice and Corporate Income Tax Competition in Southeast Asia: A Comparative Study

Abstract

Corporate income tax competition has intensified among Southeast Asian countries as governments seek to attract foreign direct investment in an increasingly integrated regional economy. This paper conducts a comparative analysis of corporate income tax policies in Indonesia, Vietnam, Thailand, and Malaysia to assess their implications for tax justice. Using doctrinal legal analysis and comparative policy evaluation, the study examines statutory tax rates, incentive regimes, and effective tax burdens across jurisdictions. The findings indicate that aggressive tax competition has led to declining corporate tax rates and expanding incentives, disproportionately benefiting multinational enterprises while constraining public revenue capacity. This dynamic undermines vertical equity and exacerbates fiscal inequality among ASEAN members. The paper argues that uncoordinated tax competition erodes the collective ability of Southeast Asian countries to finance development objectives. The global contribution of this study lies in highlighting regional tax competition as a structural challenge to tax justice in developing regions. By situating Southeast Asia within broader global debates on harmful tax competition, the paper contributes to international scholarship by advocating for enhanced regional coordination and minimum tax standards. These findings are relevant not only for ASEAN policymakers but also for other regional blocs confronting similar race-to-the-bottom dynamics.