COVID-19 and Taxation : Between the Devil and the Deep Blue Sea
The objective of this working paper is to provide guidance on the dilemma that governments are facing because of the economic crisis triggered by COVID-19. Measures adopted by governments during the contention phase to alleviate cash flow pressures...
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/908111619060497697/COVID-19-and-Taxation-Between-the-Devil-and-the-Deep-Blue-Sea http://hdl.handle.net/10986/36155 |
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okr-10986-361552021-08-18T05:10:37Z COVID-19 and Taxation : Between the Devil and the Deep Blue Sea Junquera-Varela, Raul Felix Alvarez Estrada, Daniel Lucas-Mas, Cristian Oliver CORONAVIRUS COVID-19 PANDEMIC RESPONSE FISCAL POLICY TAXATION REVENUE ADMINISTRATION TAX BURDEN FISCAL DEFICIT TEMPORARY TAX RELIEF TAX RATE E-COMMERCE DIGITAL TRADE ONLINE SALES TAX The objective of this working paper is to provide guidance on the dilemma that governments are facing because of the economic crisis triggered by COVID-19. Measures adopted by governments during the contention phase to alleviate cash flow pressures on taxpayers require budget expenditures that exacerbate revenue losses from reduced tax bases. In parallel, governments are struggling with public expenditure needs that call for creating fiscal space. During this crisis there has been a significant increase in digital transactions as well as an acceleration of digital economy business models and trends. As a result, new income sources have appeared, and governments must find ways of taxing them. The first part of this paper provides guidance on practical measures that may be applied by tax authorities to strengthen cash management and alleviate cash flow constraints on taxpayers. Most of these measures are applicable primarily during the contention phase of the COVID-19 health and economic crisis, but there are others well positioned to support the recovery phase. This paper elaborates on some of the recommendations profiled in the ‘Revenue Measurements on Tax and Customs’ document produced by the Fiscal Policy and Sustainable Growth unit,2 which serves as the umbrella document for this one. The main scope of this paper is to further develop specific practical measures for improving the cash management of businesses and households faced with liquidity constraints during this period. It also provides recommendations to revenue administrations for improving compliance and receipt monitoring during the contention phase. The second part of this paper focuses on post-crisis measures that may compensate for the fiscal deficit generated by cash flow management and temporary tax relief measures. This paper is a continuation, from a cash flow management perspective, of previous World Bank Group research conducted in the areas of fiscal policy and revenue administration implications in response to the COVID-19 pandemic. 2021-08-17T19:37:06Z 2021-08-17T19:37:06Z 2021-04-21 Working Paper http://documents.worldbank.org/curated/en/908111619060497697/COVID-19-and-Taxation-Between-the-Devil-and-the-Deep-Blue-Sea http://hdl.handle.net/10986/36155 English Equitable Growth, Finance and Institutions Insight; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
CORONAVIRUS COVID-19 PANDEMIC RESPONSE FISCAL POLICY TAXATION REVENUE ADMINISTRATION TAX BURDEN FISCAL DEFICIT TEMPORARY TAX RELIEF TAX RATE E-COMMERCE DIGITAL TRADE ONLINE SALES TAX |
| spellingShingle |
CORONAVIRUS COVID-19 PANDEMIC RESPONSE FISCAL POLICY TAXATION REVENUE ADMINISTRATION TAX BURDEN FISCAL DEFICIT TEMPORARY TAX RELIEF TAX RATE E-COMMERCE DIGITAL TRADE ONLINE SALES TAX Junquera-Varela, Raul Felix Alvarez Estrada, Daniel Lucas-Mas, Cristian Oliver COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| relation |
Equitable Growth, Finance and Institutions Insight; |
| description |
The objective of this working paper is
to provide guidance on the dilemma that governments are
facing because of the economic crisis triggered by COVID-19.
Measures adopted by governments during the contention phase
to alleviate cash flow pressures on taxpayers require budget
expenditures that exacerbate revenue losses from reduced tax
bases. In parallel, governments are struggling with public
expenditure needs that call for creating fiscal space.
During this crisis there has been a significant increase in
digital transactions as well as an acceleration of digital
economy business models and trends. As a result, new income
sources have appeared, and governments must find ways of
taxing them. The first part of this paper provides guidance
on practical measures that may be applied by tax authorities
to strengthen cash management and alleviate cash flow
constraints on taxpayers. Most of these measures are
applicable primarily during the contention phase of the
COVID-19 health and economic crisis, but there are others
well positioned to support the recovery phase. This paper
elaborates on some of the recommendations profiled in the
‘Revenue Measurements on Tax and Customs’ document produced
by the Fiscal Policy and Sustainable Growth unit,2 which
serves as the umbrella document for this one. The main scope
of this paper is to further develop specific practical
measures for improving the cash management of businesses and
households faced with liquidity constraints during this
period. It also provides recommendations to revenue
administrations for improving compliance and receipt
monitoring during the contention phase. The second part of
this paper focuses on post-crisis measures that may
compensate for the fiscal deficit generated by cash flow
management and temporary tax relief measures. This paper is
a continuation, from a cash flow management perspective, of
previous World Bank Group research conducted in the areas of
fiscal policy and revenue administration implications in
response to the COVID-19 pandemic. |
| format |
Working Paper |
| author |
Junquera-Varela, Raul Felix Alvarez Estrada, Daniel Lucas-Mas, Cristian Oliver |
| author_facet |
Junquera-Varela, Raul Felix Alvarez Estrada, Daniel Lucas-Mas, Cristian Oliver |
| author_sort |
Junquera-Varela, Raul Felix |
| title |
COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| title_short |
COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| title_full |
COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| title_fullStr |
COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| title_full_unstemmed |
COVID-19 and Taxation : Between the Devil and the Deep Blue Sea |
| title_sort |
covid-19 and taxation : between the devil and the deep blue sea |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/908111619060497697/COVID-19-and-Taxation-Between-the-Devil-and-the-Deep-Blue-Sea http://hdl.handle.net/10986/36155 |
| _version_ |
1764484619620581376 |