While taxation in most Southeast Asian countries has been progressive (Jomo
2001), liberalization and global competition have forced a shift in tax structures in
favor of high-income groups, such as through tax exemptions on capital gains, a
rise in value-added taxes, and a decline in marginal income tax rates. The declines
in tax burdens as a result of these taxation changes are more pronounced for the
high-income groups than the low-income ones, thus increasing income inequality.
Notwithstanding this trend of taxation, some Southeast Asian countries embarked
on taxation as the redistributive measure to shift tax burdens away from the lowincome
to high-income individuals or groups.