The rapid growth of artificial intelligence (AI) and digital technologies has transformed the global economy, creating new challenges for taxation systems. As businesses increasingly rely on digital platforms and AI-driven models, governments face difficulties in taxing these activities fairly and efficiently.
The current taxation framework, designed for traditional brick-and-mortar businesses, struggles to keep pace with the digital economy. Multinational corporations can easily shift profits to low-tax jurisdictions, depriving governments of much-needed revenue.
To address these challenges, governments and international organizations are exploring new approaches to digital taxation. Some potential solutions include:
Implementing a global minimum tax rate to prevent profit shifting
Introducing digital taxes on specific activities, such as online advertising
Developing new tax rules for AI-driven businesses and digital platforms
However, these solutions are not without their challenges. Governments must balance the need for revenue with the risk of stifling innovation and competitiveness.
Ultimately, a coordinated international effort is necessary to develop a fair and effective taxation system for the digital age. By leveraging AI and digital technologies, governments can create a more efficient and transparent taxation framework that benefits both businesses and society.
