European Bloc Suggests Phased Approach to Global "Digital Tax" Negotiations:
Following reports last week that the United States was withdrawing from international discussions regarding a potential "digital tax" deal, European powers including the United Kingdom, France, Spain, and Italy have suggested a slower, "phased" approach to negotiations in a letter sent to US Secretary of the Treasury, Steven Mnuchin. Reuters reports that the letter states that the European bloc believes that "a phased approach, initially focused on automated digital services, would ...make a political agreement within reach this year."
The letter continues, adding "it would also pave the way for possible transitional solutions to be discussed with the United States, notably with respect to existing or upcoming national digital service taxes."
Read more from Reuters Canada here and Accounting Today here.
Municipalities Taking Different Approaches to Tax Policy in the Age of COVID-19:
Municipalities across Ontario appear to be taking differing approaches in their tax policy with respect to the dramatic economic effects of the COVID-19 pandemic.
In Peterborough, Ontario, the municipal government is preparing municipal residents for a 2021 property tax increase of 3.5%. However, the Peterborough Examiner reports that this increase in the municipal property tax rate will not raise enough revenue to cover the estimated $6.8 million in lost city revenue caused by the pandemic.
In Waterloo, Ontario, the city is extending tax relief measures until at least the fall, which could cause lost tax revenues of up to $5.3 million. However, the city believes that due to cost-saving measures taken during the pandemic, the deficit could be reduced to $2.6 million.
Read more from the Peterborough Examiner here and Kitchener Today here.
UPDATE: Petition to Reinstate Saskatchewan Film Tax Credit Hits 3,500 Signatures:
A Saskatchewan petition to reinstate a cancelled tax credit for film productions in the province, which we covered in last week's review, has garnered more than 3,500 signatures over the last week, and is gaining momentum.
Filmmaker Alyson Ford of Milestone, Saskatchewan, who started the petition, told CBC News that "I think everybody misses film in Saskatchewan. It brings so much excitement to the province."
However, Saskatchewan's Minister of Parks, Culture and Sport Gene Makowsky told CBC News that "in 2012, we made the difficult decision to end the refundable tax credit, which acted essentially like a grant, however, we replaced it through other mechanisms, [including] a granting program through Creative Saskatchewan. The money didn't just disappear from the film tax credit. It went into other priority areas, such as schools [and] patching highways."
Read more from CBC News here and click here for the petition.
Washington Post: Governments Eye New Taxes to Pay for COVID-19 Budget Shortfalls:
An interesting piece from the Washington Post discusses the variety of new and increased tax measures many governments across the United States are looking at to deal with dramatic budget shortfalls caused by the economic effects of the COVID-19 pandemic. While the piece is US-centric, it is an interesting read for all observers, as many governments across the globe are likely to be faced with similar circumstances, and dire fiscal situations in the weeks, months, and years to come.
Read the piece from the Washington Post here.