Monitoring the ASEAN’s fiscal autonomy through signboard and advertisement tax administration: Philippines and Thailand The Philippines & Thaialnd--Who is the more progressive?

Abstract

Decentralization is an integral part of the public sector reform. Witnessing the success among developed countries, the developing world have followed suit in the hope that their localities can become self-governed and fully democratic. However, the decentralization policy must concentrate on all of the three key aspects—political, administrative, and fiscal. For the fiscal aspect, local governments must be able to proceed their revenue administration with fiscal autonomy. This is because only with this autonomy, local government can fully design their tax bases and tax rates according to communities’ economic and social conditions and urgencies. However, the current studies on decentralization policy have inadequately explored the fiscal autonomy through both local revenue administration and the comparative perspective. This paper, thus, chooses the ASEAN (i.e., the Philippines and Thailand) to represent the developing countries which have been considered the late decentralization adopters with the strong centralized systems. Additionally, it highlights the signboard and advertisement tax because it is an own-source revenue and has long been collected and administered fully by the local governments. Methodologically speaking, the paper asks “How different are the revenue administration systems of signboard and advertisement tax among local governments in the Philippines and Thailand?” and “How the Philippines or Thailand can deliberate and design the changes according to such differences?”. Applying the qualitative methods, this paper finds that the Philippines is more progressive than Thailand in terms of localities’ fiscal autonomy. Unlike those in Thailand, the local governments in the Philippines can fully design their tax structure without the interferences from their central government. Their varied tax bases and tax rates mirror their diverse local contexts, socially and economically. As a result, Thailand should earnestly contemplate the plan for its localities to enhance fiscal autonomy through the signboard and advertisement tax administration. Such plan is possibly a key to make a progress on fiscal decentralization which is dispensable for every country’s implementation of decentralization policy.