Taxise Asia LLC (WTS Taxise) | View firm profile
Post-Covid Asia Pacific recovery promises new opportunities for businesses. However, the need to replenish coffers, the changing international tax and geo-political landscape will pose challenges for tax regulators and tax leaders.
On the back of an uncertain economic backdrop, an evolving digital economy and the growing climate crisis, governments and businesses face interrelated challenges. Tax regulators in the region look to rebuild their tax and fiscal policies to maximise revenue generation, boost public finances and in some cases, repay loans from international organisations. Tax executives, meanwhile, are at the receiving end of stricter tax audits, compliance and other complex unilateral tax policies.
Despite being at the opposing ends of the tax spectrum, governments and businesses in the region need to strike a balance, for one without the other cannot result in a sustainable recovery. Here are the key themes at play in helping shape how soon economies and businesses can fully bounce back:
- Tax reliefs and subsidies for businesses have been part of a number of governments’ recovery plan in the region to help spur economic activities. This is complemented with stricter tax audits and tax compliance requirements.
- Finetuning tax laws in preparation for alignment with Pillar One and Pillar Two in a number of OECD member countries in Asia Pacific. Any delay in the implementation of the two-pillar solution is likely to lead to a proliferation of unilateral tax measures, causing greater complexity to businesses operating internationally.
- A number of jurisdictions focus on developing their markets as hub for particular sectors and industries.
- Some jurisdictions enhance policies to boost skilled immigration and tourism while others impose higher taxes on high-income earners.
- Many jurisdictions open up to the digital economy by moving many tax services online and enabling e-invoicing, while moving to tax cross-border digital services and tightening their grip on cryptocurrencies.
- Green taxes and the phased implementation of sector-specific carbon taxes and disclosure requirements are beginning in some jurisdictions. These are expected to grow, although unevenly, as the true cost of energy externalities begins to be reflected, while policy-makers still seek to preserve local competitiveness.
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Co-Founder and Principal, Taxise Asia LLC
+65 6304 7989