To maintain public services and benefits while debt stabilizes in that scenario, governments would have to increase revenues by almost 8% of gross domestic product, the OECD said. In some countries, including France and Japan, the scale of the challenge would amount to more than 10% of production, and economists did not even take into account new expenditures, such as adaptation to climate change.
“Secular trends such as population aging and rising relative prices of services will continue to put pressure on government budgets,” the OECD said in the policy paper prepared by Yvan Guillemette and David Turner. “The tax burden of these long-term trends dwarfs that associated with servicing the public debt inherited from the COVID.”
Countries do not necessarily need to raise taxes to meet these challengessaid the OECD. Instead, he called for the adoption of reforms to boost employment rates and raise the retirement age.
A combination of actions in those two areas, including ensuring that the effective retirement age increases by two-thirds of future increases in life expectancy, could halve the projected increase in tax burden by 2060 in a country. average, depending on the organization.
Tax on multinationals
A total of 136 countries reached an agreement to change the way of taxing large multinational companies and profitable companies in the world. The historic agreement seeks that these pay taxes for the benefits they generate in each State or territory where they have headquarters, as well as a minimum taxation for corporate taxes. It is about imposing an international tax reform that establishes a minimum corporate tax rate of 15% on large multinational companies.
In addition, the agreement also allows each country to tax the profits obtained in its territory by companies with more than 20,000 million euros (about 23,158 million dollars) in annual turnover and whose profitability is greater than 10%.
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