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This research aims to update policies from previous research entitled “Towards Sustainable Tax Policies In The ASEAN Region: The Case of Corporate Tax Incentives” in 2020. This research reviews tax incentive policies in each ASEAN country (The Association of Southeast Asian Nations) by paying attention to changes that occurred, especially after the COVID-19 period (2020-2021).

This research aims to gain a comprehensive understanding of the legal framework governing tax incentives in the ASEAN region. By providing a broad overview of all existing forms of incentives including tax and non-tax incentives, this study analyzes redundant and ineffective tax incentive policies with the aim of attracting more FDI in each country, which can harm not only the economy but also society.

Then this research estimates between FDI Inflows and Incentives Gap and Good Governance. The results show that there has been a reduction in the average Corporate Income Tax rate in ASEAN to around 20% and there are a number of other tax incentives in several ASEAN countries. The results of the analysis found a strong correlation between good governance and FDI, but the relationship between FDI and incentive gaps is weak. This research shows that tax incentives are less effective in attracting FDI in ASEAN, and suggests that the global minimum corporate tax rate of 15% by the OECD is too low for developing countries in ASEAN and therefore needs to be reconsidered.

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