Striking data in OECD report: 'Individuals and businesses are paying more taxes'

The Organisation for Economic Co-operation and Development (OECD) has announced that the trend of reducing taxes on businesses and individuals during the pandemic and the subsequent inflationary period is now showing signs of slowing down and reversing.

According to the OECD's Tax Policy Reforms 2024 report, which examines tax policies in various countries, governments are shifting their tax policies as they attempt to balance the need for additional resources with measures to alleviate the cost-of-living crisis affecting households and businesses.

There is a shift from the tax-reducing reforms implemented during the COVID-19 pandemic and the subsequent period of high inflation toward 'more balanced approaches' that include tax increases and efforts to broaden the tax base.

In this context, while the trend of governments reducing taxes on businesses and individuals is now showing signs of slowing down and reversing, tax policy is evolving toward long-term fiscal priorities.

TAX POLICIES HAD SOFTENED DUE TO COVID-19 AND INFLATION

OECD Secretary-General Mathias Cormann, in his assessment of the report, stated that tax reforms were one of the key policy tools used by governments to protect households and businesses from the highest inflation levels in a decade and the economic impacts of the COVID-19 pandemic.

Cormann used the following expressions:

'We are now seeing the policy focus shift toward creating the fiscal space needed to respond to future shocks and to support the long-term structural transformations our economies and societies are facing, such as digitalization, artificial intelligence, changing trade patterns, climate change, and population aging, and this shift must continue.'

OECD Secretary-General Mathias Cormann

News Source: AA