Different perspectives on the future of tax
It was a pleasure to be joined by approximately 70 thinkers from very different backgrounds and perspectives to discuss the future of taxation this week in London at the KPMG Responsible Tax Idea Exchange. As the latest in the series of ongoing discussions we are convening around the topic of responsible tax in collaboration with Jericho Chambers, this was the largest responsible tax discussion we have held to date, bringing together diverse perspectives for robust and focused dialogue about the future of tax in an increasingly globalized, digitized world.
We fully respect the decision of some individuals who may choose not to take part in a given discussion or event. However, some of you may have seen an article published by the Financial Times, which highlighted that two tax campaigners had “boycotted” the idea exchange. It is worth noting that 70 leaders from business, NGOs, academia and the tax profession did indeed come together at this event to discuss and hear many different perspectives and voices.
We had very positive feedback from all attendees about their experience at the event and the importance of convening discussions like these. Since the inception of our Responsible Tax initiative four years ago, our goal has been, and continues to be, to bring together diverse viewpoints on key areas of interest to tax. The topics covered at the London event included:
- Fresh thinking for green taxes
- The future for digital taxation
- Rethinking corporation tax: is formulary apportionment the answer?
- Is VAT progressive enough?
- Perspectives on personal tax: Shifting the burden from taxing employment
- Are property taxes fully utilized?
The conversations around these were candid and congenial. I do not claim that we came to consensus, but there was open dialogue and a sense of embracing the opportunity to share and not shy away from contrasting views. I believe this courage to engage with all perspectives is crucial to our ability to get this right, and I want to thank and commend all of those who came out to do so.
Some of the provocations which came out of the workshops were as follows:
- Should we introduce an annual wealth tax based on land value?
- Will technology make it possible to make VAT more progressive in future by enabling rebates to people on low income?
- Is it possible to incentivize employment by reducing employment taxes and shifting the focus to green taxes?
- Income from self-employment and employment should bear the same tax burden
- Corporation tax needs to change in order to meet the more digitalized, globalized needs and pressures of the 21st Century, but how best to transform this system for the better requires more debate and discussion
- Is some kind of tax on data the way forward for addressing the impact of digitalization?
We will now look to see how we can further develop some of these themes as part of the responsible tax debate and the ongoing challenge of adapting analogue tax policies to a digitized world.
What to Tax? publication
The London event was a chance to launch our new What to Tax? Publication, which likewise brings together more than 18 authors, a range of specialized contributors from both within and beyond KPMG, and which we have positioned as a starting point for further thoughts and dialogue on the topic, both online here at kpmg.com/responsibletax, and in further in-person events and roundtables we are planning in order to keep the conversation going.
As I said in my previous blog post when we kicked off the What to Tax? story-gathering process, the question of what we need from tax systems in a modern context is a deceptively simple one, and we know, simple questions are often the most challenging to answer. But one thing that was clear at this week’s event and throughout the publication process is that people from across the full political spectrum agree that it is time to rethink tax in a holistic way—to consider how tax systems really work, and what we need from them in a globally connected world. I believe the modern context demands that it be considered through a global lens as opposed to a national one—through dialogical discussions rather than in echo chambers. Many of our attendees expressed the same belief.
Importance of voices in the debate
Now, more than ever, there is a responsibility upon all stakeholders to bring their voices to the table to help inform future tax systems that are fit for today and tomorrow. That we still see people questioning who can engage on this topic, and with whom, only affirms my belief that the work we are doing is important. That convening all ranges of thinkers on this topic is critical, and that our ability to do so is paramount to our ability to find a way forward. Our commitment to doing so remains unwavering.
We invite ongoing dialogue and article contributions here on the Responsible Tax site, which is now a community of several hundred people that continues to grow. This discussion needs all of these voices and more. Thank you for being a part of it.
Areas of expertise Operating Effectiveness Pensions and Retirement Funds Tax Tax planning Tax strategiesEducation and qualifications MA St Hugh's College, OxfordAccreditation HM Inspector of TaxesProfessional Associations Forum for Tax Professionals Tax Policy Committee of the ICAEW