Post-pandemic Tax Reforms in the EU and other Member States to encourage Economic
Growth.
Student’s Name
Course
Date
Post-pandemic Tax Reforms
, 2
COVID-19 has made the governments go an extra step to stabilize their economies.
After the pandemic, the fiscal policy will surely change. At this crisis period, businesses are
trying their best to protect their profitability and manage their cash flows. Taxation authority will
get back to normal after the medical crisis starts to decline, and the recovery begins. The states
are reaching deep into their pockets to support their economies. For instance, the United States
has surpassed a $2 trillion support package, whereas UK ventures carrying out innovations
during the pandemic can get £1.25 billion government fund. Besides, Singapore is supporting its
businesses and workforce with SGD 4 billion. Because of much expenditure, changes are most
likely to happen to the fiscal policies. This idea means that the businesses will have to adhere to
the state’s technique to adopt either carrot or stick policy1.
Under the stick approach policy, the taxation authorities have extended the deadlines
for tax payments and filing during the medical crisis. These are measures regarding direct taxes.
The Value-added tax declarations still require to be filed and have bills payment made as per the
normal deadlines in most jurisdictions. Based on the economic response of the pandemic, the
states may consider increasing indirect taxes.
Under the carrot approach to fiscal policy, the government may decide to take many
positive paths after the crisis has subsided. However, it may lower the rates of indirect taxes as a
way of economic recovery. This will reduce the cash coming into the government’s coffers and
promote a new wave of firms looking for an effective base for the desirable cross-border
activities. The reduced tax rates of indirect tax make the prices of commodities cheaper to the
consumers. When the taxation rates are slow, the consumers tend to spend more, increasing the
1 Barbier, Edward B. "Greening the post-pandemic recovery in the G20." Environmental
and Resource Economics 76, no. 4 (2020): 685-703.
Growth.
Student’s Name
Course
Date
Post-pandemic Tax Reforms
, 2
COVID-19 has made the governments go an extra step to stabilize their economies.
After the pandemic, the fiscal policy will surely change. At this crisis period, businesses are
trying their best to protect their profitability and manage their cash flows. Taxation authority will
get back to normal after the medical crisis starts to decline, and the recovery begins. The states
are reaching deep into their pockets to support their economies. For instance, the United States
has surpassed a $2 trillion support package, whereas UK ventures carrying out innovations
during the pandemic can get £1.25 billion government fund. Besides, Singapore is supporting its
businesses and workforce with SGD 4 billion. Because of much expenditure, changes are most
likely to happen to the fiscal policies. This idea means that the businesses will have to adhere to
the state’s technique to adopt either carrot or stick policy1.
Under the stick approach policy, the taxation authorities have extended the deadlines
for tax payments and filing during the medical crisis. These are measures regarding direct taxes.
The Value-added tax declarations still require to be filed and have bills payment made as per the
normal deadlines in most jurisdictions. Based on the economic response of the pandemic, the
states may consider increasing indirect taxes.
Under the carrot approach to fiscal policy, the government may decide to take many
positive paths after the crisis has subsided. However, it may lower the rates of indirect taxes as a
way of economic recovery. This will reduce the cash coming into the government’s coffers and
promote a new wave of firms looking for an effective base for the desirable cross-border
activities. The reduced tax rates of indirect tax make the prices of commodities cheaper to the
consumers. When the taxation rates are slow, the consumers tend to spend more, increasing the
1 Barbier, Edward B. "Greening the post-pandemic recovery in the G20." Environmental
and Resource Economics 76, no. 4 (2020): 685-703.
