Taxes in a Globalised World

Taxation Today and in the Future

The revenues of the Swedish Tax Agency essentially derive from taxes on labour and taxes on consumption. Public discussion sometimes revolves around the question of whether today’s tax bases are the most suitable in terms of efficiency and distribution. Occasionally, policymakers put forward proposals for new tax bases, such as a robot tax, financial tax, inheritance and gift tax, and wealth tax. Questions that will be asked within the framework of the project are:

• Should labour, capital and consumption be taxed differently in the future?
• How can tax revenue be guaranteed at the level needed to finance public expenditure?

International Harmonisation of Tax Regulations

Member states of the OECD and the EU have launched several joint projects during the last few years, with the aim of redrawing the field of international taxation. The major economies are driving these developments, and they are expected to be of significant consequence for Swedish firms, private individuals, and Sweden’s public finances.

States have also entered into a number of bilateral information-sharing agreements aimed at counteracting illegal tax evasion, which prompts the following question:

• How do new international tax rules affect Swedish companies and their competitive position, as well as tax revenues in Sweden?

Globalisation Increases Competitive Position

The Swedish economy has increased rapidly its integration with the global economy, and Swedish companies now face challenges from significantly more foreign competitors. A tax system that encourages enterprise, innovation, and some risk-taking is important in a globalised world. Globalisation also makes the international market for highly skilled labour more competitive. We must therefore ask the following question:

• How can the tax system be designed to increase companies’ competitiveness and motivate people to acquire higher education and increase participation in the labour market?

Digitalisation, Technological Development and Changed Consumption Patterns

When taxes were last radically reformed in Sweden almost 30 years ago, the Internet was in its infancy. Today, the entire economy is becoming rapidly digitalised. For Swedish industry, technological advances involve significant investment and, consequently, also significant risk-taking. Digitalisation has also given rise to new business models incorporating the sharing economy. Companies offering new types of digital solutions thus compete with companies operating in the traditional economy, and it is sometimes unclear how these new actors should be taxed. Possible questions include:

• How should the tax system handle rising levels of e-commerce and the expansion of the sharing economy?
• What are the likely broad tax bases in the future, assuming further globalisation and technological development?