How much of a dent has the pandemic put in tax authorities’ revenues, and what actions will they take to fix it? An article on Oracle News Connect tackles these questions.
“Governments at all levels are scrambling to compensate for lower tax revenues, creating uncertainty among hard-hit businesses about the future tax bite they need to plan for,” the article notes, adding that Vertex is stepping up to help its more than 4,000 customers in 130+ countries meet that challenge. Vertex Chief Tax Officer Michael Bernard offers some key insights in the article. He expects “a flurry of legislative activity” to rebalance income, property and sales taxes.
On the income tax front, Michael reports that while U.S. consumers and small businesses enjoyed an extension on their tax return deadlines for calendar year 2019, that didn’t do much to help companies that need to file on a monthly tax schedule. Looking ahead, he expects jurisdictions to increase income tax rates and remove some exemptions.
Governments may also introduce new sales taxes, especially for services, Michael reports. Their reasoning? “If you can afford to hire someone to mow your lawn, clean your clothes, clean your house, or do things like that, then you are able to pay the tax associated with that.” For the first time, businesses could see taxes on services such as accounting, legal, engineering and/or IT.
The article notes that complying with taxes across regions and countries is a complex and costly task, even in normal circumstances. There are more than 19,000 global taxing jurisdictions with rules that are constantly changing. And that’s why many companies turn to providers like Vertex and Oracle for guidance, the article adds: “You don’t want tax calculations or tax processing as an educated guess.”
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.