Skip to main content
Contribution to Book
The Experience of the Philippines in Taxing Its Nonresident Citizens
Income Taxation and International Personal Mobility (1989)
  • Richard Pomp, University of Connecticut School of Law
Jagdish Bhagwati has written extensively about the “brain drain”, which has sparked at least four major international conferences on the subject of whether developing countries should tax the income of their citizens living abroad. Unlike the United States, the Philippines, and (formerly) Mexico, no other nations at the time levied such a tax. The author of this chapter was commissioned by the World Bank to conduct a case study of the Philippine taxation of its nonresidents in order to gain knowledge of any administrative hurdles to such a system.

The first section of this chapter examines the taxation of nonresident citizens in the Philippines during three time periods: before 1970, 1970 to 1972, and after 1973. The country used different approaches in all three periods. The two main problems that arise are (1) whether a less developed country should tax nonresidents in the same manner as it taxes residents, and (2) administrative difficulties. The next section of this chapter analyzes the consequences of these problems on the Bhagwati proposal. This section proposes a resolution to the structural concerns, but the administrative difficulties of enforcing such a proposal are more problematic. This chapter concludes by determining that the success of the Bhagwati proposal rests with the developed countries. If developed countries commit to assisting less developed countries in collecting the income tax on nonresidents, the proposal could succeed. If not, however, it will likely accomplish few of its main objectives.
Publication Date
Jagdish Bhagwati
Citation Information
Richard D. Pomp, The Experience of the Philippines in Taxing Its Nonresident Citizens, in Income Taxation and International Personal Mobility (J. Bhagwati ed. 1989).