Of the fallouts of the pandemic, one that has drawn the spotlight is the growing asymmetries among people, societies and nations with a K-shaped post-Covid-19 recovery. With different segments recovering at starkly different rates, it is imperative for governments and corporates to build trust in the ecosystem, at a time when trust is at a premium and more complicated to earn. Governments need resources to be able to support those less-privileged sections of society and businesses that are poised somewhat precariously on the sliding arm of the K-curve. Organisations on their part need societal stability and access to skilled resources to persist with their sustainable operations and contribute to the act of nation-building.
Governments have often been going the extra mile to build trust with corporates and society, focussing on the ease of doing business and social security spending aimed at those at the bottom of the pyramid. They also need resources to invest in infrastructure pertaining to health, education and employment, to generate jobs and make the young population more employable. The fiscal stress to meet such expenditure demands may have to be met through a funnel of taxes and levies.
Taxes and tax policies, in fact, could play a catalytic role in India’s economic revival. Consequently, governments are grappling to find the most efficient ways of raising revenues in a manner that can lead to achieving the goal of sustainable financing. Tax policy is being increasingly viewed as the principal driver of socio-economic reform and growth. Governments are seeking to establish a robust and dynamic tax system that not only strengthens the edifice of a fair, equitable and stable tax architecture, both globally and in the domestic context, but also encourages the setting up of a framework for cooperative compliance in an environment of trust between the taxpayer and the tax administration.
Corporates, on their part, are gradually coming forward to proactively support the government by being more agile, contributing necessary resources for infrastructure development, generating employment opportunities for the youth and undertaking upskilling initiatives. It is also upon them to bridge the digital divide by creating innovative solutions, often in tandem with governments, especially in the field of education and health services delivery.
Building trust and transparency, and ensuring sustained outcomes for both the government and organisations are akin to Yin and Yang that complement one another. As a community of solvers coming together in unexpected ways, it is for us to modify the K-curve and address the pre-existing challenges – such as technological disruption, climate change, fractured geopolitics and social tension. This in turn will help us deliver sustained outcomes that create value across the board for today and tomorrow.
Partner and Leader, Economic Advisory Services Government Sector Leader, PwC India