Governments can look to tax measures to help support economies that are grinding to a virtual halt as the novel coronavirus shuts down businesses around the world, the OECD said.
Tax measures can help as policymakers look to “support households and improve liquidity for businesses to keep the productive capacity of
economies intact as much as possible,” the Organization for Economic Cooperation and Development said in a March 20 document.
The tax policy suggestions are part of a larger package of proposals from the group, including international cooperation on healthcare and research efforts, coordinated central bank policy, and joint policies to address healthcare and employment issues with government investment.
The OECD’s tax suggestions include:
- Support for individuals by increasing welfare, unemployment, sick-leave, and other benefits
- Waiving employer or self-employed social security and payroll taxes
- Exempting some income from tax for health care workers
- Value-added tax policies, including deferring VAT, customs, or excise duties for imported items like food and medicine and speeding up excess refunds of VAT
- Changes to loss carry-forward provisions to make them more generous for businesses.