The Digital Renaissance of Tax Administration
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Greece: Replaces stamp duty with new digital transaction fee of up to 3.6% from 1 December 2024.
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Ghana: Launches second phase of VAT e-invoicing implementation.
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Nigeria: Plans to introduce FIRS e-Invoice platform to improve tax administration.
Harmonizing Global Tax Frameworks in a Fragmented World
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Japan: Updates Q&A document on Pillar 2 Global Minimum Tax, including QDMTT Safe Harbor requirements.
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Curaçao: Plans to implement Pillar 2 Global Minimum Tax as part of 2025 fiscal year budget policy.
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OECD: Publishes Model Competent Authority Agreement for Amount B of Pillar 1.
Indirect Taxation as an Economic Stabilizer
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Thailand: Extends 7% VAT rate for another year until 30 September 2025.
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Latvia: Plans to extend reduced 12% VAT rate on fresh fruits, berries, and vegetables until 31 December 2028.
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Venezuela: Further extends temporary exemption from VAT and customs duty on certain imports to 31 December 2024.
Recalibrating Personal Taxation in the Post-Pandemic Era
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Latvia: Proposes new individual income tax rates of 25.5% and 33% for 2025.
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Sri Lanka: Adjusts personal income tax structure, increasing tax bands from LKR 500,000 to LKR 720,000.
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Armenia: Increases late payment penalty for SMEs from 0.04% to 0.075% per day, effective 1 January 2025.
Cultivating Innovation Through Targeted Fiscal Ecosystems
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Philippines: Introduces 20% corporate tax rate for enterprises under Enhanced Deduction Regime.
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Malaysia: Announces tax incentives for Forest City Special Financial Zone, including concessionary corporate tax rates of 0% to 5%.
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United Kingdom: Extends Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) scheme by 10 years to 5 April 2035.
Insights:
This week’s developments signal a pivotal shift in global tax dynamics, with implications that extend far beyond mere policy adjustments. The accelerating implementation of the OECD’s two-pillar solution, evidenced by Japan’s QDMTT Safe Harbor clarifications and Curaçao’s Pillar 2 plans, points to a future where tax arbitrage opportunities may significantly diminish. This could reshape global investment flows and corporate structures in unprecedented ways.
The digital revolution in tax administration, exemplified by Greece’s new transaction fee and expanding e-invoicing initiatives, heralds a new era of real-time taxation. This trend could lead to the emergence of “predictive tax compliance” systems, where AI-driven algorithms anticipate and adjust tax liabilities in real-time, fundamentally altering the relationship between taxpayers and authorities.
The cultivation of innovation-focused fiscal ecosystems, as seen in Malaysia’s Special Financial Zone and the UK’s extended investment schemes, points to an emerging “tax competition 2.0.” In this new paradigm, countries compete not just on rates, but on the sophistication and tailoring of their entire fiscal environments to specific industries or economic activities.
