In many jurisdictions, privately owned businesses have proven to be the economic drivers and long-term engines of growth. The KPMG Private Enterprise Tax report titled Carving a new path: How private companies can contribute to future economic stability strongly suggests that supporting the resilience, adaptability, innovation and long-term focus of privately owned companies is in everyone’s best interest.
This remains relevant today as governments across the world are looking for ways to raise money to reduce their post-pandemic debt and address the decline in tax revenues.
Should governments therefore target their efforts toward more tax incentives to stimulate growth versus introducing tax rate increases? Or is it important to achieve the right balance between a mix of taxation changes and incentives?
As tax professionals, we don’t believe that the world can, in fact, tax its way out of debt. It’s our view that the best way forward is to put energy back into the economy to fuel growth and to focus on the future with incentives that encourage innovation, R&D, green energy and other essential priorities that can help bring people back to work and boost productivity.
The tax and regulatory environment is constantly evolving and it’s important for private companies to understand the “what” and “why” of proposed tax changes and how they can impact their business.
With heightened pressure from stakeholders and regulators for transparent reporting in every aspect of their business, companies should endeavor to be proactive and consider establishing systems and a supporting internal organization that would manage clear, transparent and, above all, consistent reporting to satisfy the various demands, whether it is ESG, tax, or other regulatory requirements. Businesses should ensure that their reporting aligns with their business, tax and social profile.
We welcome your thoughts on the propositions we are putting forward and other issues and opportunities that you believe are important to consider.
We want to hear your views and encourage you to contact us at privateenterprise@kpmg.com or through your local KPMG Private Enterprise Tax professional.
We are committed to keeping the dialogue open with regular updates on the views of private business leaders like yourself on the KPMG Private Enterprise Tax website.
