The Confederation of British Industry (CBI) is calling for an international tax framework that provides certainty, is unified and is transparent for businesses and people.
Describing the current tax system as “lumbering”, the CBI says that businesses are currently having to navigate a “fragmented century-old tax system” that is not designed to support the modern business world.
The business group has also painted the proposed UK Digital Services Tax as “a solution in a silo” that would only add to the cost and complexity of the tax system. Moreover, it believes that the Government should be a leading voice in agreeing to a single international tax framework with the Organisation for Economic Co-operation and Development (OECD) and actively discourage insufficient measures. As the CBI points out, there is no international consistency on tax, even regarding what businesses should be taxed on.
Although the CBI recognises that the Government is introducing the Digital Services Tax in April 2020, the organisation feels that this will just “wallpaper over the cracks” and is, therefore, calling for an international consensus that will ensure firms are subject to taxes which equate to only taxing their profits, not revenues, once.
As a spokeswoman for the CBI said, it would be “high risk” for the UK to go it alone on a digital services tax. Therefore, the organisation wants any action taken by the Government to be in step with global partners.
She added that business adoption of new technologies should be encouraged not hampered, and any new approach must be supported internationally and be based on evidence from firms from a wide range of sectors.
Rob Chedzoy, Partner at Milsted Langdon said: “The CBI is leading calls for an updated tax system that will support the modern business world.
“If you are struggling to get to grips with any aspect of tax that affects your business then it is important that you seek specialist advice. Contact a member of our team today to find out how we can help you.”