Key insights
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1
Outdated Framework: The international tax system was designed in a bygone era, failing to keep pace with the complexities of the modern global economy. This has led to significant gaps that multinational corporations can exploit.
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2
Digital Economy Challenges: The rise of the digital economy presents unique taxation challenges, as traditional tax rules struggle to capture the value created by digital services and intangible assets.
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3
Tax Evasion and Profit Shifting: Current tax rules allow for significant tax evasion and profit shifting, where corporations move profits to low-tax jurisdictions, undermining the tax bases of higher-tax countries.
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4
Calls for Reform: There is a growing consensus among policymakers and economists that the international tax system needs comprehensive reform to address these issues and ensure a fairer allocation of tax revenues.
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5
Global Cooperation: Effective reform will require unprecedented levels of global cooperation, as countries must work together to create a cohesive and enforceable tax framework.
Takeaways
The international tax system is in dire need of reform to address the challenges of the modern global economy. By updating outdated frameworks, addressing the digital economy's unique issues, and curbing tax evasion and profit shifting, a fairer and more efficient system can be established. However, achieving this will require significant global cooperation.