So long as it introduces better transparency in tax matters over the European Union, the Commission decision on the corporate tax package is welcome. However, where it serves as part of a wider programme to introduce harmonisation of taxation across member states, the package must be critically scrutinised. Member states especially in the Eurozone are implementing uniform rules in financial and economic decision making. This is working to the advantage of members having better economic endowments. One cannot deny to those who have less endowments, especially smaller and peripheral countries, the remaining flexibility in tax policies. Current accounting systems to measure profits and expenses date from when manufacturing was the main sector of economies. As services and digital activities, accompanied with a globalized mode of production and marketing, become increasingly predominant, the task of determining profits and expenses is now much more complex. In the circumstances the easiest way by which to claim to be curbing tax evasion by MNCs, is by imposing tax harmonisation, using existing accounting methods. This is unfair. Indeed, the characteristic of any corporate tax package should be flexibility, equally applicable to all, not only to the bigger economies as has happened with SGP rules.
Post a comment