Taxation and the Peer-to-Peer Economy
IMF Working Papers, August 8, 2017
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- Taxation and the Peer-to-Peer Economy
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Bibliographic details
- Authors: Aqib Aslam, Alpa Shah
- Published: August 8, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484313763.001
Summary
- The growth of the peer-to-peer (P2P) economy over the last decade has captivated both stock markets and policymakers alike.
- Digital platforms connect individual buyers and sellers directly, changing means of transacting but not fundamentally altering the tax behavior of individuals operating in this economy.
- The P2P economy has potentially exacerbated existing policy, administrative, and revenue-mobilization challenges associated with small business taxation—such as the choice of the tax base and how to set tax thresholds.
- The technology behind P2P platforms presents a valuable opportunity to eventually solve these challenges.
Key findings and themes
- The tax behavior of individuals in P2P markets is "very familiar" despite differences in transactional methods.
- P2P platforms may exacerbate:
- policy challenges related to small business taxation,
- administrative challenges related to tax collection and compliance,
- revenue-mobilization challenges, including decisions on tax bases and thresholds.
- Technological features of P2P platforms offer potential solutions to policy and administrative problems.
Policy considerations and implications
- Addressing small business taxation issues remains central: choice of tax base and setting of tax thresholds are highlighted as core challenges exacerbated by P2P growth.
- Platform technology could be leveraged to improve tax administration and compliance over time.
Content in this bundle
- Taxation and the Peer-to-Peer Economy, WP/17/187, August 2017