The Organisation for Economic Co-operation and Development (OECD) published, on Saturday 21 March, a list of tax measures that governments could take to mitigate as much as possible the impact of COVID-19 on their taxpayers.
On its new platform entirely devoted to the fight against the COVID-19 epidemic, the OECD proposes a series of emergency measures to address what its Secretary-General, Angel Gurría, calls “the third and greatest economic, financial and social shock of the 21st century, after the attacks of 11 September 2001 and the global financial crisis of 2008”.
These are not “recommendations”, the OECD says, but only suggestions “to help policymakers respond in their own national context”. Not all of these measures are available to all tax authorities, and some may require legislative changes, it adds.
The OECD suggests first of all that governments should temporarily provide more “generous” social benefits, including to those who are not normally entitled to such benefits, such as the self-employed. This could include, in its view, wider access to unemployment benefits, sick leave and family leave.
Sectors hard hit by the crisis could also benefit from an exemption from social security contributions or other payroll deductions that are paid by employers or self-employed workers, in order to immediately reduce labour costs, according to the OECD.
Another measure that could be considered is to provide tax benefits to workers in the health sector and other sectors that are on the front lines of the pandemic. Governments could, for example, partially exempt overtime income from personal income tax and social security contributions, the OECD suggests.
With regard to the value added tax (VAT), the OECD proposes deferring the payment of VAT, customs or excise duties on imported basic necessities such as food, medicines or protective equipment, while avoiding abuse through “prudent administration”.
It also advises tax authorities to give taxpayers affected by COVID-19 additional time to complete their tax returns and make their tax payments. Administrations could also consider waiving penalties and interest on late payments and provide taxpayers with easier access to payment plans, the OECD says.
In recent weeks, several countries have already taken steps to try to relieve their taxpayers of the economic consequences of the pandemic. Italy, France, Belgium and the Netherlands have already announced measures to suspend or defer tax returns and tax payments for their most affected taxpayers. More announcements are expected to follow. (Original version in French by Marion Fontana)