An Emergency Tax Plan to Confront the Inflation Crisis
How can countries address inflation? A new Report from the Independent Commission for the Reform of International Corporate Taxation identifies some important tax strategies to raise much-needed resources to address the global cost of living crisis.
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Speaking on the Report's release, PSI's Assistant General Secretary Daniel Bertossa outlined how existing measures such as those undertaken by the OECD simply do not go far enough in addressing the broken global corporate tax system. He said:
“The G20/ OECD tax deal will not stop corporations using tax havens to dodge paying their fair share – especially large tech firms. Nor does it allocate the revenue it does collect to the countries that most need it.
ICRICT Co-Chair Jayati Ghosh said: "The Digital Companies of course benefited hugely through the pandemic - and continue to benefit today. Yet they continue to avoid taxes today."
The Report outlines new measures which, if implemented, could raise revenues for governments to use to help address the spiralling cost of living for average people in countries across the world.
Discussing the proposed OECD Tax Plan Nobel-Prize winning economist and ICRICT Co-Chair Joseph Stiglitz said: "I'm very pleased at the adoption of many of the overarching ideas that ICRICT has advanced, yet I am very disappointed about the details that have emerged."
PSI calls on all countries to support a 25% global minimum corporate tax rate and use the increased revenue to ensure that countries in the global south get their fair share based on where real economic activity takes place.
It is shocking that even this weak deal is now likely to be blocked by some developed countries in the US and the EU. Countries should not wait. Rather they should consider their own alternative measures, formulated where possible in a coordinated manner, to be actively implemented without delay. Only this can ensure they are able to collect the revenue so desperately needed to fund quality public services and vital infrastructure during this time of crisis.
PSI also noted that there is increasing call for windfall taxes.
"We must ensure those companies that have made massive profits from the COVID, energy and food crisis without contributing anything more to the real economy pay there fair share."