AS per a New OECD Report, governments should use tax policy to drive
forward economic agendas that seek to boost growth while sharing the benefits
more evenly within society.
Tax Design for Inclusive Economic Growth
examines the role that tax systems play in promoting inclusive growth. Against a
backdrop of historically high income and wealth inequality, this new OECD
research underlines the key role that tax policy can play in not only supporting
growth, but also in addressing distributional concerns.
The
OECD work will be a key subject of discussion during a ministerial-level G20 Tax
Symposium on July 23 in Chengdu, China, just prior to the meeting of the G20
Finance Ministers and Central Bank Governors on 23-24 July.
The
Symposium - hosted by G20 President China, in co-operation with Germany, which
will preside over the G20 in 2017, and with the support of the OECD – will offer
G20 Finance Ministers and high-level policymakers the opportunity to discuss how
to better use tax policy tools to drive forward the inclusive, pro-growth agenda
while providing businesses with greater tax certainty, to promote trade and
investment.
“Tax
policy has a clear role to play in helping achieve strong, sustainable and
balanced growth,” OECD Secretary-General Angel Gurría said. “We are confident
that the OECD’s latest research on tax design for inclusive growth can become
part of a new tax policy contribution to the G20 agenda moving
forward.”
Tax
policy design options to be considered are grouped under four broad
categories:
++
broadening tax bases and removing tax expenditures that are not well-targeted at
redistributive goals;
++ enhancing the progressivity of tax systems
beyond personal income tax and taking into account the overall progressivity of
the tax and benefit system;
++ taking steps to affect pre-tax behaviours
and opportunities, including those that induce individuals to develop and
optimally build up and use human capital and skills; and
++
enhancing tax policy and administration, notably by bringing workers from
informal sectors into the tax network through well-designed policies.
The
OECD suggests that further analysis be undertaken to identify the scenarios
where tax reforms stimulate inclusive growth and those where they do not, and
how such tax reforms will interact with a country’s existing tax policy
settings, its level of inequality and its stage of development.
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