The Global Pandemic, Sustainable Economic Recovery, And International taxation
The global pandemic has led to major structural increases in public expenditure to support health, incomes and employment. The question of who will ultimately foot the bill will need to be answered, but the economic burden must not fall disproportionately on disadvantaged groups and countries. Reductions in corporation tax ‘to stimulate reconstruction investment’ will be neither economically effective nor socially desirable. Rather, corporate tax systems should be strengthened by accelerating truly inclusive international cooperation on base erosion and minimum rates, by making these taxes more progressive to stimulate small firms, and by ensuring effective taxation of the offshore wealth of shareholders. The report lists five steps governments can take to tackle tax avoidance ―which has left governments with fewer resources to meet critical priorities in the wake of the pandemic― end the era of tax havens and the ‘race to the bottom’ on corporate taxation.
