People with higher incomes and companies benefiting from the corona crisis have to temporarily pay more taxes, the International Monetary Fund (IMF) states in its biennial tax monitor. Only in this way will governments be able to continue to pay the costs associated with the corona pandemic, it sounds.
The many support measures resulting from the corona pandemic have created a hole in the budgets of countries worldwide. The total budget deficit rose in developed countries in 2020 to 11.7 percent of gross domestic product (GDP), the measure of a country’s economy. Government debt reached 97.3 percent of GDP worldwide, according to the IMF.
Last year, the Netherlands had a budget deficit of 4.3 percent of GDP and a debt of 54.5 percent. It is the first time in five years that our budget has been in the red.
IMF wants contributions from high incomes and companies
To compensate for these shortages, the IMF therefore proposes that people with a higher income should be taxed more heavily. “Policymakers may consider a temporary COVID-19 contribution for higher incomes or large assets,” the report said.
In addition, the institution is considering a tax on so-called excess profit in companies, the part of the profit that remains after tax and the payment of the dividend. As a result, companies that profit from the crisis, such as tech companies or vaccine makers, will certainly make their contribution, it says.
Finally, the IMF points out that the corona crisis has sharply increased inequality. According to the report, the difference between income and assets is the second largest in the Netherlands. Our country must only let the United States come first.