The International Monetary Fund (IMF) has said that a well-coordinated taxed Economy can lead to a fairer and greener global economy.
The IMF disclosed this in a statement titled, “Tax Coordination Can Lead to a Fairer, Greener Global Economy.” It urged countries to do more to promote beneficial information on who owned a company.
“Technology, globalization, and global warming have changed the world, and taxation must keep pace. Individuals can move money across borders with a mouse click, and corporations can transact with their affiliates across global supply chains.
“Production depends on intangible know-how assets that can be located anywhere. Employers and their employees can work in different countries. As income and factors of production become more mobile, and with climate change threatening our planet, countries face tax challenges that know no national borders.
“Coordination can deliver tangible results, and 163 countries have agreed to exchange information under the Global Forum on Transparency and Exchange of Information for Tax Purposes. Yet, more can be done to improve the reliability of the information. Countries should do more to promote beneficial ownership registries information about who really owns or controls a company.”
The Washington-based money lender reiterated that effective use of the information remained critical as enforcement and low-income countries would need to develop more know-how to realize the benefits of transparency.
“Some countries have already established such mechanisms. But how they are implemented matters. Information from the registries should be centralized in a public database. Effective use of the information remains critical for enforcement and low-income countries will need to develop more know-how to realize the benefits from transparency.”
It said tax evasion and avoidance caused the loss of revenue that could have financed social spending or infrastructure investments. The IMF warned that if countries set their tax policy without regard for the adverse effects elsewhere, all countries could end up worse off.
“Tax evasion and avoidance cause the loss of revenue that could have financed social spending or infrastructure investments. They also exacerbate inequality and perceptions of unfairness. The self-serving national policies of one country can affect others in damaging ways. If each sets its own tax policy without regard for the adverse effects elsewhere, all countries can end up worse off,” it said.
