September 16, 2019 - Douglas Myser

Global tax reform has slowed. The pace of tax reform has slowed across most leading economies, a new report from the OECD says, calling for bolder tax reforms to address future challenges. Tax Policy Reforms 2019 describes the latest tax reforms across all OECD countries, as well as in Argentina, Indonesia, and South Africa. The report identifies major tax policy trends and highlights that fewer countries have introduced comprehensive tax reform packages in 2019 compared with previous years. The most comprehensive tax reform was introduced in the Netherlands, the report says. Other significant tax changes were in Lithuania (labor taxes), Australia (personal income taxes), Italy (corporate income tax), and Poland (personal and corporate income tax). Global tax reform has slowed.

In other countries, tax reform in 2019 have been less significant and often undertaken in a piecemeal fashion, the report says. "At a time when countries are facing many significant challenges, such as weakening economic growth, ageing populations, income and wealth inequality, the changing nature of work and climate change, the appetite for growth enhancing, structural tax reforms seems to be waning. In the face of these challenges, it is clear that bolder action is needed", said the Director of OECD. Global tax reform has slowed. Corporate tax rate reductions tend to be those that have higher initial tax rates, leading to further convergence in corporate tax rates across countries, the report says.

The report shows that a number of countries have continues to lower personal income taxes, especially on low and middle income earners and the elderly. Some countries have also expanded tax incentives to support pension savings and small savers as the United States did with the input of the IRS. As in the previous report, there were very few changes to property taxes. The OECD said they are under-utilized "in spite of their revenue raising and equity enhancing potential, and their positive efficiency properties." There was little movement in terms of headline value added tax rates, the report says, with the OECD stating that: "High standard VAT rates have led a number of countries to look for alternative ways of raising additional revenue, in particular through the fight against VAT fraud". IF you are an American citizen fighting a VAT tax in America from business overseas, call for our Tax Resolution Services.

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