The IMF suggests raising taxes on companies with profits "excessive"

The IMF suggests raising taxes on companies with profits "excessive"

The IMF lays out various ways that governments can help companies affected by the pandemic.

He considers that such support should be limited to circumstances in which there has been a “market failure” but also warns that in the sectors hardest hit by the pandemic, which can drag down the rest of the economy, it is therefore better to encourage restructuring or the reconversion.

Given the difficulties of identifying the sectors that really need help, the IMF recommends that governments study the possibility of temporarily raising taxes on companies that have “excessive” profits.

“This would help to recover some of the transfers” that have been given to firms that “did not need them,” the document adds.

In any case, the report recalls that the impact of the pandemic on the financial status of households and companies has been uneven around the world, and also depends a lot on the economic composition by sector of each country.

Services provided in person fell while production and exports of substitute goods and services for face-to-face services have improved.

In addition, the tourism and hospitality labor market has still not recovered two years after the pandemic, while on the opposite side, logistics and construction have seen their working conditions improve, especially wages.

The war in Ukraine has also affected supply chains and energy and food prices to a greater extent, the rise in prices of which will also affect the capacity of households.

With information from EFE

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