On 5 September 2018, the OECD published its annual report on recent tax policy reforms around the world. The report covers 38 countries and looks at major tax policy trends and recent initiatives. It highlights the significance of economic stimulus driven by tax policy setting, as countries use tax reform to lower taxes on business and individuals to boost investment, and examines the effect of recent significant tax reforms in certain nations including the United States.
Key findings from the report include:
- The ongoing trend of lower corporate taxes, which has been driven by tax reforms in countries with traditionally high corporate tax rates. The average corporate income tax rate across the OECD has dropped from 32.5 percent in 2000 to 23.9 percent in 2018. In his editorial Pascal Saint-Amans comments that “the countries that introduced corporate tax rate cuts in 2018 included some of the countries that had the highest tax rates in 2017. If anything, these countries appear to be engaged in a ‘race to the average’ rather than in a ‘race to the bottom’, with their recent corporate tax rate cuts now placing them in the middle of the pack. There will be much interest in observing how countries respond to this trend in the future”;
- A look at the effects of major tax reforms in the United States, Argentina, France and Latvia, as well as smaller reforms in other nations;
- The introduction of new excise taxes to deter harmful consumption, such as sugar taxes; and
- Other tax reform trends, including personal income tax cuts and the introduction of earned income tax credits, and indirect tax rate stabilisation and environmental taxes.
For further information, please contact Sarah Beeraje.