We need a new tax system

The global minimum tax was intended to ensure greater tax fairness – but it has effectively failed. Major economic powers such as the United States, China and India are not participating, while European companies are burdened with high bureaucratic costs and low additional revenues.

Tax expert Christoph Spengel no longer sees this as a viable option. Instead, he is calling for a digital reboot of the tax system. Value added tax in particular must become more important – especially in the digital sector, where many services have hardly been taxed at all to date. The state must learn to levy taxes where consumption takes place – for example, with the help of payment service providers.

At the same time, Spengel advocates a fairer inheritance tax system. Currently, even billion-dollar fortunes can be passed on tax-free under certain conditions. In his view, a simple flat tax without special regulations would be fairer – but politically difficult to implement. For Spengel, one thing is clear: the current tax system is no longer suited to the globalised, digital economy. A comprehensive overhaul is long overdue. Why did the global minimum tax fail? In an interview with the Börsen-Zeitung, Prof. Dr. Christoph Spengel describes what needs to change in the tax structure.