The way that countries have been managing their economies has to change according to a new report.
The OECD says that slow growth, high uncertainty, and growing levels of inequality, mean that now is the time for reform; and that includes a key shift in taxation.
In its report Going for Growth 2019, the organization says that shifting taxation from income to property will boost growth, especially in advanced economies.
“As growth is slowing down, and new technologies are rapidly transforming our economies, it is urgent to pursue reform efforts to boost inclusive and sustainable growth,” said OECD Secretary-General Angel Gurría, launching the report in the run-up to the 17-18 July meeting of G7 finance ministers in Chantilly, France.
The report says that governments must carefully select, prepare, prioritise and implement country-specific structural reforms that boost long-term growth, improve competitiveness and productivity, create jobs and ensure a cleaner environment and equal opportunities for all.
For Canada, this includes reform of the tax system to ensure efficiency of tax structure, shifting shares of revenues to less growth distorting sources, and tax collection.
Other key priorities for Canada include: Competition, regulation and trade; and openness of FDI; lifting barriers and disincentives to full-time labour market participation of women (including improving childcare accessibility); and education and skills.
The OECD report also focuses on the environment and says that growth must be sustainable in this regard.
Recognising the major challenges that still exist for addressing pollution, climate change and environmental sustainability, the report suggests countries make better use of environmental taxation, phase out agricultural subsidies and environmentally harmful tax breaks, and take additional steps to reduce emissions from transport, including more investment in better and low-emission public transport.
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