Addressing Tax Challenges in the Digital Economy: Potential Measures and Global Responses

• The digital economy has changed the way businesses operate and generate tax revenues.
• Businesses no longer need a physical presence in a jurisdiction to operate and generate revenue there.
• Tax rules designed for traditional businesses may not be suitable for the digital economy.
• Ghana is concerned about the narrowing tax base and needs to address this issue.
• The digital economy encompasses all economic activities generated through digital infrastructure.
• Revenue in the digital economy can come from sources such as advertising, digital content sales, subscriptions, and user data exploitation.
• Traditional income tax rules based on physical presence may overlook digital income streams.
• The OECD/G20 Inclusive Framework on BEPS proposed a two-pillar solution to address tax challenges in the digital economy.
• Pillar One allocates taxing rights to the markets where revenue generating activities occur, regardless of physical presence.
• Pillar Two ensures multinational corporations are subject to a minimum 15% tax rate in all jurisdictions they operate in.
• Individual jurisdictions have also introduced policies and taxes to address digital economy profits.

Source: taxathand.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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