A new IMF working paper on ’Taxation and the peer-to-peer economy’ looks at the implications of the digital, peer-to-peer (P2P) economy for tax policy and administration, concluding that the case for a separate or special tax treatment is ‘not immediately obvious’ (see http://bit.ly/2vCVnmN).
The paper suggests that policymakers should be wary of imposing extra burdens on P2P activities, sometimes called the ‘sharing economy’ and the ‘gig economy’, which risk crushing the market altogether, because P2P transactions depend heavily on low transaction costs. Increased taxes are usually more difficult to collect from small businesses and could have the effect of forcing some participants back to the informal sector.
Potential benefits of the large amount of information held by digital platforms could include helping reduce compliance burdens, with governments exploring the possibility of using the platforms as withholding agents, at least for indirect taxes.
A new IMF working paper on ’Taxation and the peer-to-peer economy’ looks at the implications of the digital, peer-to-peer (P2P) economy for tax policy and administration, concluding that the case for a separate or special tax treatment is ‘not immediately obvious’ (see http://bit.ly/2vCVnmN).
The paper suggests that policymakers should be wary of imposing extra burdens on P2P activities, sometimes called the ‘sharing economy’ and the ‘gig economy’, which risk crushing the market altogether, because P2P transactions depend heavily on low transaction costs. Increased taxes are usually more difficult to collect from small businesses and could have the effect of forcing some participants back to the informal sector.
Potential benefits of the large amount of information held by digital platforms could include helping reduce compliance burdens, with governments exploring the possibility of using the platforms as withholding agents, at least for indirect taxes.
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