On 30 September 2024 the OECD published the latest edition of Tax Policy Reforms: OECD and Selected Partner Economies. This annual publication provides comparative information on tax reforms in a number of countries. The latest report looks at the tax policy reforms made in 90 member jurisdictions of the OECD/G20 Inclusive Framework on BEPS, including all the OECD countries. The report includes details of tax reforms announced or implemented in the calendar year 2023, analysed across different tax categories.

The latest issue notes that policymakers have been attempting to balance the provision of relief to support households and businesses through the cost of living crisis with the need to increase domestic resource mobilisation. Governments have taken measures to protect and broaden their domestic tax bases, by increasing tax rates or phasing out tax relief. However there have also been reforms aiming to expand personal income tax relief for households, together with temporary VAT reductions or cuts to environmental taxes. The calendar year 2023 saw fewer rate cuts and more tax rate increases and base broadening initiatives across various taxes.

The trend in corporate income tax (CIT) rate cuts seems to have come to an end, and in 2023 more jurisdictions implemented rate increases than decreases. This change reflects the need for additional tax revenues and more equity within the tax system. Countries providing favourable CIT treatment to businesses are choosing measures to narrow the tax base rather than using rate decreases.

Progress has been made towards implementing the global minimum tax for large multinational enterprises in line with Pillar Two of the OECD approach to taxation of the global economy. A total of 36 jurisdictions took steps towards an application of the global minimum tax starting in 2024, and some expect to implement legislation taking effect from 2025. Climate considerations are increasingly influencing the design and use of tax incentives, including the use of base narrowing measures to promote clean investments and facilitate the transition towards less carbon-intensive capital.

Governments are still supporting households through the economic difficulties by providing personal income tax relief, but more of the jurisdictions surveyed are implementing increases to social security contributions. Since the pandemic, more attention has been given to problems arising from demographic shifts such as population ageing, rising healthcare costs, and a greater need for social protection financing. There has been a growing trend to broaden and increase social security contributions.

Reforms to personal income taxes have generally focused on supporting low- and middle-income households, with measures introduced to narrow the tax base. In some countries there have been progressive reforms shifting the tax burden away from low-income households. However, reforms to capital income taxes have remained modest in line with the trend of recent years.

The pace of measures to provide VAT relief on energy has slowed down, but countries are using the VAT system to encourage the transition to lower-carbon economies through measures such as reduced rates for electric vehicles or zero rates for solar panels. Also several high and upper-middle-income countries have increased their health-related excise taxes on tobacco, alcoholic beverages, sugar sweetened beverages (SSBs) and gambling. Several countries, mainly high-income jurisdictions, increased their carbon tax in 2023 to support the transition to a low-carbon economy.