TĐH: There are many intangible benefits from foreign direct investments (FDI) – employment and jobs for the local population, increased education, increased professional skills, better law enforcement and legal process, better working and living conditions in general for the locality… Not just taxes. Tax is a small part of the benefit package. If we need to lower/exempt taxes to compete, then let’s do that to compete. If the entire gang of Asia or Southeast Asia countries agree not to use taxes to compete, then that is “an agreement not to compete,” in a national scene that would constitute a violation of antitrust (anti-competition) law, harmful to consumers and to the economy. The economic principle should not be different in the international scene. (But of course, we need to compete both in business environment and in financial benefits such as taxation and land lease).

By Dat Nguyen, Quynh Trang   November 16, 2020 | 08:07 am GMT+7 vietnamnetWorkers seen in a foreign-invested air conditioner manufacturing plant in the northern province of Hung Yen in December 2019. Photo by VnExpress/Vien Thong.

The average corporate income tax rate in Southeast Asia has fallen from 25.1 percent in 2010 to 21.7 percent this year, showing that countries are competing with one another in a “race to the bottom” by offering aggressive tax incentives to foreign multinationals, a recent report by Oxfam, a global organization working on poverty alleviation, and its partners said.