Taxes: like a sword of Damocles, they hover over companies; like snakes, business leaders freeze when faced with their complexity; like disasters, their avoidance is often declared as one of the central business objectives!
Indeed, we don’t have to pretend: the tax burden is increasing, as is the complexity of tax regulation. Tax competitiveness between states does the rest, in particular since national laws have been and are being adjusted according to international tax optimization options (read: tax avoidance).
As a result, one can see increases in uncertainty, in grey area tax avoidance strategies and in tax evasion. These consequences are being accompanied by a cost explosion for tax firms which often have to explain to out of their depth fiscal authorities what the international tax situation is like. Even when no taxes are due, the costs for those advisory services are born by the company. Politicians and fiscal authorities are never held accountable for their mistakes after all! Certainty for investors looks different!
However, to me the most depressing aspect seems to be the situation of the large mass of mid-size businesses that are the back bone of business after all! According to my estimates, these represent over 90% of all companies (with up to just 10 employees). These firms are not only simply unable to cope with the complexity but are also unable – unless they are set up internationally – to even participate in the international tax competition.
Of course I could “just” demand the simplification and harmonization of at least corporate income tax, wage tax and value added tax inside the European Union. But I am fully aware that, on the one side, I cannot change anything and that “only” Europe is not enough, and that, on the other hand, politicians won’t accept such a perceived disempowerment.
What remains for me and entrepreneurs, who never participate in demonstrations, is to point out those glaring problems more or less loudly, but certainly with insistence. Harmonization and simplification of the tax system will, in my opinion, not only improve transparency, decrease costs for both companies and the state, as well as increase tax honesty, but will also increase the credibility of the taxation system.