Since I was at Davos last year there have been some seismic global changes, not least to taxation.
There have been dramatic shifts in both direct and indirect taxes across the world, most obviously in the U.S. with the passage of the Tax Cuts and Jobs Act. I’ve been coming to Davos for the past four or five years, and this year, there has been a buzz; businesses and governments are aware that we have challenges ahead, but the mood is clearly optimistic.
Yesterday I had the chance to discuss the impact of recent global tax changes with Mark Weinberger, global chairman and CEO of EY, when we were interviewed for the Thomson Reuters Davos channel. We agreed that it’s hard to gauge the direct economic impact of lowering the U.S. corporate rate, but the reforms do signal a shift toward increased transparency across the world and pose some interesting challenges for Base Erosion and Profit Shifting (BEPS) and U.S. overseas investment.
Discussions at Davos tend to shift to reflect the challenges that business and government already face, or are likely to face in the future. For instance, four years ago, we were discussing being on the brink of the fourth industrial revolution, and how AI or robotics were going to change our lives and our work. With this came the fear that this new wave of technology would eliminate jobs. But the conversation this year has shifted; we are now discussing how the latest technology could actually augment jobs and create new employment opportunities. In short, we are now discussing the challenges and consequences of living through the fourth industrial revolution.
What will be the next challenge? Where will new solutions be needed? Could it be the rise of populism and the threat this poses to international trade? Could it be the next wave of technology? Or how to regulate and tax cryptocurrencies? Will it be how corporations can best reskill their staff, or how to enable all communities to engage with the latest technology? Or perhaps a challenge we have not yet seen.
Whatever it is, I’m looking forward to an interesting 2018. And as I leave Davos this year, I know that Thomson Reuters will continue to ensure that our teams have the necessary skills they need to succeed and that they trust that the corporate leadership are acting in the best long-term interests of the company.