Digital economy taxes in the Arab countries

[yota691]

Digital economy taxes in the Arab countries

Tuesday 27th April 2021 21

 

 Abu Dhabi: Follow up

 

The Arab Monetary Fund has issued a study entitled "Taxes on the Digital Economy in the Arab Countries". The study, which Al-Sabah followed up, comes in light of the Fund’s interest in supporting the efforts of Arab member states in their endeavor to address the challenges of applying taxes to digital transactions, in order to enhance the protection of national tax rules, tax justice and economic competition, in light of the growing economic activities based on digitization. 

The study was based on the results of a questionnaire prepared by the Arab Monetary Fund to monitor the challenges facing Arab countries in applying taxes to the digital economy, and the nature of the efforts taken and planned to address those challenges related to the ability of the current tax rules to deal with activities based on digitization, in the absence of an international consensus on the distribution of rights. Interstate taxation.

The study highlighted the importance of the digital economy in terms of expansion, growth and financial resources reaped by digitization-based companies.

It also indicated the repercussions of not subjecting the digital economy to taxes, represented by the erosion of national tax rules, lack of tax justice and economic competition, as well as the challenges facing the application of taxes to the digital economy at the Arab and international levels, the development of international efforts to address them, and the nature of measures and procedures. Planned and taken at the level of Arab countries in this regard.

The study confirmed that there is awareness at the regional and international levels of the importance of taxes on the digital economy in terms of the need for this sector to contribute to the public resources of countries in relation to its size and profitability, in addition to the need to correct the disparity in tax burdens between digital and traditional companies, but there is difficulty preventing the application of rules and standards Current international and domestic tax on digital transactions. 

Therefore, there is a need for concerted international efforts to reach an international consensus on international tax rules and standards that guarantee the fair distribution of tax rights among countries.

She stated that in light of the delay in reaching an international consensus, a number of countries around the world have taken unilateral measures to enable the application of taxes on the profits of companies based on digitization, which may have negative repercussions on international trade and technical development. The study indicated the need for Arab countries to focus on several areas, including reviewing and amending tax legislation and agreements to keep pace with the rapid technical development, benefit from the multilateral agreement to combat international tax evasion, collecting the required data on digital economy activities, building electronic databases, and developing tax administrations by developing Information systems and raising technical capabilities.