Digitalization as a determinant of the tax mix: a panel data analysis of OECD countries
摘要
While the challenge of digitalization in terms of tax revenues have long been well-known and studied in the literature, the potential effects of digitalization on the tax mix has also been raised as an issue but studied to a lesser extent. These twin challenges have, over the last decade, resulted in a global debate over how the international tax system should be changed in response, with the OECD leading the way. Progress on a consensus solution appears to be on the policy horizon. This study uses an extended measure of the tax revenues which have been raised on three bases, namely capital, labour and consumption – which was developed in the literature on tax ratios – as shares of total tax revenues for the tax mix and IP address data as a proxy indicator of digitalization across countries, applying panel data analysis techniques to examine the effect of digitalization on the composition of the tax mix of OECD countries over the period from 1995 to 2018. The results indicate that digitalization may have a limited effect on the relative shares of taxes in the tax mix which runs contrary to what is often assumed in the literature and policy debates, a finding which should be of interest to policymakers and the public.