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Wednesday, July 21, 2021

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The writer is assistant professor, NIPFP.

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Suranjali Tandon writes: It raises many questions that administrators must address through reform.

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Tue, Jun 15, 2021

The deal between the seven countries is being labelled a landmark, but in the absence of 132 other members of the inclusive framework, including handball usa, co-opted on an equal footing by OECD, it is not yet a global deal.

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The call for a minimum tax may be seen as US correcting for the slippages in its own tax laws and as a means to finance the $2 trillion spending programme.

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With little flexibility to change rates or to redefine the tax base, it is expected that the rate of growth in tax revenue will approximate GDP growth.

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As countries calibrate their response to competing demands for sovereignty to tax, DST is an interim alternative outside tax treaties. It possesses the advantage of taxing incomes that currently escape tax and creates space to negotiate a final, overarching solution to this conundrum.

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If the commitment to a fair and impartial system and a time-bound resolution of matters is to be met, the new processes, with reviews and anonymity, must ensure efficiency in case selection and consistency in assessment.

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A multilateral approach is needed to resolve concerns over digital taxes.

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As US announces investigation against countries, it may be more pragmatic to accept such levies and negotiate bilaterally.

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Citizens ordinarily advocating for free markets are now urging the governments to open up its coffers

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Loss expected from lower tax rates may be countered by gains from the settlement of cases, higher dividend taxes on top incomes, and the wider scope for taxing international incomes.

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The idea of consensus, though critical for international relations, must also be evaluated in light of the misalignment of economic interests between developing and developed countries. A good tax system is often evaluated along the axes of certainty, simplicity and neutrality.

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