Matthew stephenson, Professor

Although it took a while, hopefully now Governments and Businesses around the world have come to realize that the coronavirus is not the same as the recession in 2008.While both significantly impacted the global economy, the drivers propelling the market crisis during Covid-19 are very different from what caused the recession in 2008.As India and the world heads into a phase where the crisis wanes, policymakers have to increase the focus on the economic rebound for their respective countries. Tax policies are likely to play a significant role as the country steers its economy towards gradual recovery.Policies and measures taken now would have an impact on tax systems in the future.Taxation is a key ingredient in the social contract between citizens and the economy' (Doing Business, 2018). In the sight of the pressing need of the hour to move towards economic recovery, governments will have to pay closer attention to how taxes are raised and spent.Deloitte's report 'Recovery from the COVID-19 crisis: What role will tax policy play', discusses that tax will play a key role in restoring the public finances of countries. While growth focus is imperative, it will be ideal to do this by offering support for healthy growth, including stimulus packages that will in turn help expand tax revenues.EY Global Vice Chair - Tax, Kate Barton compellingly presents, "as the tax ecosystem continues to evolve, tax authorities are not only experiencing substantive change but also driving it".Tax and Fiscal Policy in Response to the Coronavirus Crisis, a report by OECD, outlines that 'tax policy can contribute to covering the costs of the crisis'.The case for increased tax revenue is understood but the timing and how it is done are critical as businesses and individuals are keen to get back up and running. Taxes cannot afford to be perceived as an added burden to pandemic-struck industries and businesses in the country that is exhausted from being cautious of the COVID-19 blade of uncertainty hanging over the head.Barton of EY wisely states, "eventually, governments will look to balance budget deficits and taxes will invariably rise - but timing those increases carefully will be crucial if governments are to drive growth".A recent Doing Business study reveals that firms in economies that score better on the study's ease of paying taxes indicators tend to perceive both tax rates and tax administration as less of an obstacle to business.In their article "The Effect of Corporate Taxes on Investment and Entrepreneurship" for the American Economic Journal: Macroeconomics, Djankov, et al. point out that "economies with simple, well-designed tax systems can boost businesses activity and, ultimately, investment and employment". Rabah Arezki and Gregoire Rota-Graziosi put it quite simply by saying that "designing taxes that are simple to administer is the way to go" for the post-COVID era.Another pragmatic approach would be to plan for a sustainable source of increased tax revenue from growth through increased business activity, profits, and increased employment.What are the potential sources that India and other developing nations can tap into to increase tax revenue? One solution need not fit all in this case. Specific groups of individuals and large corporations could be targeted through increased income tax rates and/or base-broadening measures, new minimum taxes, wealth taxes, and other indirect taxes such as Digital Services Taxes (DSTs).During the pandemic, digital emerged to become imperative for the survival of orgzations, and individuals. Tax policies that incentivize digital infrastructure and operations can assist in encouraging investment in these areas (Deloitte.)"For governments looking to drive economic recovery after the pandemic, supporting such digital competitiveness will be key. One way is through foreign direct investment (FDI) in the digital economy", Matthew Stephenson and Nivedita Sen, World Economic Forum.Turning into an FDI hub while aiming for economic recovery will not be a small feat for India. Multiple aspects of the economy have to be conducive to encourage this. An all-around approach will be imperative to tap into this source of finance.For the post-COVID economy and going ahead, tax authorities and tax policymakers will have to embrace transparency and accountability in a new way. The need and importance of tax have to be communicated with all taxpayers in the country clearly and regularly.Taxes will invariably rise but this is an opportunity to fix inconsistencies and inadequacies in the country's tax system. Policymakers should be willing to identify and work on areas for improvement. It is important to ensure that chasing tax revenue does not cause further despondence in the economy.The post-COVID economy should foster a transparent and reliable tax ecosystem in India that has a clear grip on the bigger picture and be citizen-centric. Can that be achieved?A global thought leader, disruptor and innovator with an entrepreneurial flair, Lal Bhatia has conceptualized and developed new business models in the most challenging environments.Bhatia's has invested 33 years in kick-starting New-Ventures, Building Teams, Managing Change, Developing Brands and Businesses and Strategizing Digital Transformation. Lal has a vast network of clients and professionals in every corner of the globe, which he believes in cross leveraging for the task at hand.Lal Bhatia is the Chairman of the Hilshaw GroupThis story is provided by PNN. will not be responsible in any way for the content of this article. (/PNN)( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Business :Taxation for post-COVID recovery by Dr Lal Bhatia PhD

Although it took a while, hopefully now Governments and Businesses around the world have come to realize that the coronavirus is not the same as the recession in 2008. ...