Commonwealth finance ministers have recognised the potential of technology to improve debt transparency while urging closer collaboration to resolve tax challenges arising from growing digital commerce.
Ministers have therefore agreed that the Commonwealth should bring its powerful collective voice to ongoing discussions at the Organisation for Economic Co-operation and Development (OECD), particularly on behalf of smaller states, said a press release received in Dhaka on Monday, reports BSS.International agreement on digital taxation could enable countries to benefit by taxing large tech giants, even if they do not operate within their jurisdictions.
These decisions were made by ministers who gathered in Washington DC for the 2019 Commonwealth Finance Ministers Meeting under the theme ‘preventing debt crises: the role of creditors and debtors’.
Revenues from tax collection are important for maintaining debt at sustainable levels, yet can often be impaired by the digitalisation of trade in services, as this often results in countries being unable to determine when, how and where taxes on digital transactions should be collected.
Commonwealth Secretary-General Patricia Scotland said: “The Commonwealth has a distinctive contribution to make by bringing together nations with developed and developing economies to agree on collective approaches and action towards a fair and equitable global system for taxing multinational businesses in a swiftly digitalising economy.”