Tax Policy Reforms 2024

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights a shift in tax policy reforms across OECD countries, indicating a trend towards increasing tax rates and broadening tax bases in response to economic challenges and the need for additional revenues [13][15][16] - Policymakers are balancing the need for increased domestic resources with the necessity of providing tax relief to alleviate the cost-of-living crisis affecting households and businesses [14][19] - The trend of decreasing corporate income tax (CIT) rates has halted, with more jurisdictions implementing rate increases for the first time since 2015, reflecting a need for additional revenues and equity within the tax system [16][63] - Significant progress has been made towards implementing the Global Minimum Tax (GMT), with 60 jurisdictions taking steps towards its introduction [16] Summary by Sections Macroeconomic Background - Global GDP growth was estimated at 3.1% in 2023, with many economies affected by high inflation and geopolitical tensions [23] - The unemployment rate in OECD countries was 4.9% at the end of 2023, indicating a stable labor market despite economic challenges [30] - Public debt rose to 113% of GDP for the OECD as a whole in 2023, with government deficits increasing again due to the energy crisis [36] Tax Revenue Context - The average tax-to-GDP ratio across OECD countries decreased by 0.15 percentage points to 34.0% in 2022, with significant variations in tax revenue sources [43][45] - High-income countries saw a rise in corporate income tax revenues driven by heightened profits, particularly in the energy sector [43] Tax Policy Reforms - The report documents tax reforms introduced or announced in 2023 across 90 jurisdictions, showing a trend towards increasing rates and broadening bases [13][59] - Personal income tax (PIT) reforms focused on supporting low- and middle-income households, while social security contributions (SSCs) have seen increases in many jurisdictions [17][66] - VAT relief measures on energy products are slowing, with some jurisdictions increasing their standard VAT rates [19][67]