Earlier quoted context omitted.
Intel makes chips in many such countries, like costa rica and Malaysia. There are many countries around the world with good standards of living and lower taxes and lower overall regulatory burden. Plus with Internet businesses and the easy ability to have virtual office with employees living remotely, you can locate your business in a jurisdiction that is more favorable. Intel or Microsoft can't move, but starting a…
> > Bolivia or Burma or Afghanistan > Intel makes chips in many such countries, like costa rica and Malaysia. many "such" countries... there is a _HUGE_ difference in freedom, social economic development and stability between these two sets of countries. i dont reckon the infrastructure in the first set of countries would be sufficient for intel to consider it.
It is ironic, of course, that the very tax exemptions granted to Intel and other TNCs under the rules of the Zona Franca, means that these companies do not directly contribute to an increase in the tax revenue needed for significant improvements in infrastructure and education that they benefit from. It is unfortunate that these companies do not appreciate the need to contribute to the generation of the country specific assets they are looking for. But it is even more unfortunate that the government does not recognize the need for such a contribution either. The tax reform attempts that have been sent to the congress only timidly open up the possibility of taxes on TNCs, and with the fear that perhaps these firms will decide to leave the country, in search for more favorable treatment in other developing countries. Of course, these fears are well grounded as firms (like the comments by Intel above) have made it very clear that they do not want to be taxed.
http://ase.tufts.edu/gdae/Pubs/rp/DP13Paus_CorderoApr08.pdf
as the article continues:
Stopping the tax rate race to the bottom among developing countries ultimately requires the imposition of tax floors at a global level, a formidable challenge.