As Countries Advance Fiscal Cooperation, Higher Taxes Could Come Crypto’s Way
According to the members of a panel held during this year’s World Economic Forum in Davos, developed countries around the world are moving toward increased fiscal cooperation, which might lead to tighter taxation of corporations but also of personal holdings under the so-called wealth tax. This revelation has the potential to tighten the world’s tax regimes on cryptoassets and crypto companies, among other things.
The panel, A Reimagined Global Tax System, was dominated by advocates for higher wealth and capital taxes. The panelists discussed the October 2021 worldwide agreement on base erosion and profit shifting (BEPS), to which 141 governments and jurisdictions have pledged to impose a 15% global minimum corporate tax rate. According to Mathias Cormann, Secretary-General of the Organisation for Economic Cooperation and Development (OECD), new regulatory measures are needed to allow tax administrations around the world to fully enforce their tax laws on large participants.
“In my perspective, it’s in the rational interest of the United States to be a part of the accord,” Cormann said in response to an audience member’s concern about the potential consequences of a Republican takeover of Congress when Americans vote for new politicians this November.
According to Harvard University’s Nathaniel Ropes Professor of Political Economy Stefanie Stantcheva, there is a growing push among nations to coordinate their tax laws in order to remove fiscal loopholes that allow capital to dodge taxation.
“I do believe that this global tax deal is in the spirit of properly taxing capital,” she added, adding that enhanced fiscal cooperation among various countries is “essential to allow better enforcement.”
As Countries Advance Fiscal Cooperation, Higher Taxes Could Come Crypto’s Way According to Gabriela Bucher, Executive Director of the non-governmental organization Oxfam International, there is a need for a transparent global asset registry that would allow the wealth of individuals around the world to be taxed. There is a group of countries that tax individual assets, although she claims that wealth taxation earned only 4% of total collected taxes in 2017.