Taxes in a Globalised World

Increased globalisation and rapid technological development have opened and changed the Swedish economy. How does this affect the efficiency of the tax system and its redistributive function? In order to contribute new knowledge, SNS is launching the ‘taxes in a globalised world’ research project, which will start in the autumn of 2018 and continue for three years.

Taxation today and in the future

The tax revenues of the Swedish public sector essentially consist of tax on labour and tax on consumption. Public discussion sometimes revolves around the question of whether today’s tax bases are most suitable in terms of efficiency and distribution. On occasion proposals are put forward for new tax bases, some examples being 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

Several joint projects have been launched within the OECD and the EU during the last few years with the aim of redrawing the field for international taxation. The development is driven by the major economies and is expected to be of importance for Swedish firms, private individuals and Sweden’s public finances.
A number of bilateral information agreements aimed at counteracting illegal tax evasion have also been entered into at country level, 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 undergone a rapid process of internationalisation rapidly and Swedish companies nowadays operate in global competition. A tax system that encourages enterprise, innovation and some risk taking is important in a globalised world. Internationalisation also means that international markets for well-educated and qualified labour are increasingly competitive. In this light we must ask the following question:
– How can the tax system be designed to increase companies’ competitiveness and motivate people to partake in education and on the labour market?

Digitalisation, technological development and changed consumption patterns

When taxes were radically reformed in Sweden almost 30 years ago, Internet was hardly in use to any great extent. Today, the economy is rapidly being digitalised. For parties in Swedish industry, technological development involves major investments and, consequently also major risk taking. Digitalisation has also given rise to new business models that contain aspects of the sharing economy. Companies with new types of digital solution therefore compete with companies operating in the traditional economy, and it is sometimes unclear how these new actors should be taxed. Possible questions:
– How should the tax system handle the growing e-commerce and the sharing economy?
– What are the likely broad tax bases in the future, given further globalisation and technological development?

Facts about the project

On-going studies

The European Union and corporate taxation in Sweden. Mattias Dahlberg, professor of Fiscal Law at the Faculty of Law Uppsala University. Preliminary time of publication is in November 2019.

Time frame

2018–2020.

Contacts

Research Director: Mikael Witterblad, mikael.witterblad@sns.se, 0705-32 28 89.

Project manager: Emelie Lekebjer, emelie.lekebjer@sns.se, 0737-53 32 07.