Turning the ASEAN Dream into Reality AFTA 2003 Sixth 6th ASEAN Finance Ministers Meeting Dialogue wi

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Turning the ASEAN Dream into Reality AFTA
2003Sixth (6th) ASEAN Finance Ministers
MeetingDialogue with the US-ASEAN Business
CouncilTraders Hotel, YangonApril 5, 2002

• Al dAliberti
• Vice President, Finance ASEAN Operations

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We are accustomed to say, out of long
observation and experience, that it is not
prosperity that makes the automobile, so much as
it is the automobile that makes prosperity. It
gives a momentum and diversity to the peoples
activity which tends constantly to increase and
is most difficult to stop.Henry Ford, 1926
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Ford Investment - A Strong Commitment to Asia
1995-2000 in Million USD
China 300
Vietnam 120
India 300
Philippines 200
Thailand 500
Malaysia 25
1.3 bn. Investment
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Five things ASEAN Can Do to Encourage Growth in
the Automotive Industry

• Reduce Regional Tariffs on Schedule.
• Resist Offsetting Lower AFTA Duties through
  Higher Downstream Taxes.
• Rationalize MFN CBU/CKD Tariff Regimes.
• Replace Engine-Displacement-Based Taxes With
  Value-Based Taxes.
• Adopt Efficient Electronic Payment and Compliance
  Methods.

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Recommendation 1Import Tariffs Must Come Down
-- and Stay Down!
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Recommendation 2Resist Offsetting Lower AFTA
Duties through Higher Downstream Taxes
Proton
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Recommendation 3Rationalize MFN Tariff Rates
Passenger Car Tariff Rates - 2003
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Recommendation 3Rationalize MFN Tariff Rates
Truck Tariff Rates - 2003
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Recommendation 4Replace Engine Displacement
Based Taxes

• Tailpipe Emissions are Not Closely Related to
  Engine Size.
• Engine Emissions Technology has Severed the
  Relationship Between Engine Size and Tailpipe
  Emissions.
• Vehicles with Larger Engines are Not Always Less
  Fuel Efficient.
• In Modern Vehicles, Engine Size is a Poor
  Determinant of the Fuel Efficiency of a Specific
  Vehicle Model.
• Engine-displacement Based Taxes Do Not Make Good
  Policy for the People of ASEAN.
• They harm consumers by limiting choices, they
  harm manufacturers by forcing designs around the
  tax system and limiting exports, and they harm
  governments by limiting revenue collected.

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Recommendation 5Improve Electronic Processing

• Replace Paper Documents (i.e. tax receipts) with
  electronic documents.
• Allow Electronic signatures.
• Allow Electronic billing and transactions.
• Allow Electronic payment systems.

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