As published on news.bloombergtax.com/daily-tax-report, Wednesday 15 April, 2020.
Countries will have to explore all tax and fiscal options to help stimulate their economies post-pandemic, including boosting ongoing efforts on taxation of the digital economy, the OECD said.
The call came in a report published Wednesday that analyzes countries’ emergency tax and fiscal policy measures and how they can support economic recovery. It also outlines major policy reforms that will be needed to restore public finances.
“Tax policy responses have been strong and rightly focused to date on providing liquidity,” said Angel Gurria, secretary general of the Organization for Economic Cooperation and Development. “These efforts will need to continue as containment is relaxed gradually, to ensure a strong recovery.”
The recovery is unlikely to be smooth, which will require that countries be adaptive in the policies they use, the report said.
“The crisis should prompt debate on how wide-ranging tax reforms, including solidarity levies, carbon taxes and supporting greater progressiveness across the tax system, can help governments better restore public finances,” the report said.
Adressing the tax challenges of the digital economy and ensuring multinational companies pay a minimum level of tax will be even more important after the crisis, the OECD said.
It called for more multilateral cooperation, which the OECD argues is key in aiding countries’ efforts to recover from the pandemic’s economic fallout and help build resilience for future shocks.