The IMF suggested temporarily raising taxes on companies with excessive profits

The International Monetary Fund (IMF) is committed to continuing to help companies affected by the pandemic but that are viable in the future, and to unload something public effort suggests temporarily raising taxes on companies that have “excessive” profits.

In one of the papers presented during the first day of its spring meeting on debts and challenges facing the private sector, the IMF also recommends that governments “gauge the pace of their fiscal consolidation”.

Thus, he understands that the most recovered economies may begin to reduce aid “faster”, but warns that those who are not at that point may still suffer long-term disruptions and problems.

In this report, the Fund sets out various ways in which governments can help companies affected by the pandemic.

Thus, he believes 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 may drag the rest of the economy, it is better to encourage restructuring or conversion.

Recognizing that deciding which businesses are likely to be viable to help is complicated, the Fund recommends that governments “reduce the burden” of public aid consider temporarily raising taxes on companies with “excessive” profits.

“This would help recover some of the transfers” that have been given to signatures 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 in the world, and it also depends a lot on the economic composition by sector of each country.

Face-to-face services fell while production and exports of goods and services substitute for face-to-face ones have improved.

In addition, the tourism and hospitality labor market is still not recovering two years after the pandemic, while on the other hand logistics and construction have seen their working conditions improved, especially wages.

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

(With information from EFE)

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