OBELA Analysis

In July 2021, the OECD and G20 countries presented the "Declaration on a two-pillar solution to address the fiscal challenges arising from the digitalization of the economy" that aims to alleviate the fiscal pressures arising from the covid-19 crisis and adapt to the digitalization of the economy. The structure of the tax reform will be based on two pillars.

Pillar one seeks to develop profit tax rules for companies that are highly digitized and conduct operations around the world. While, Pillar two continues BEPS taxation efforts with the introduction of a global minimum tax regime.

The implementation of these rules will help to improve economic recovery in countries that face difficulties in their tax collection, such as Latin American countries.

Despite the change of government in the U.S., the policy and actions taken with respect to Chinese technological containment remain intact, and international pressure continues to prevent Chinese companies from installing their digital transition technology.

The technology war and U.S. fears have had a marginal impact on the Asian giant's relations with Latin America. Some countries have bowed to Washington's pressure against the use of 5G, but most continue to negotiate its implementation.

The challenges that Latin America must overcome to put this technology into operation relate to the lack of infrastructure and the size of the investment.

Global inflation is rising rapidly in a year of uneven growth rates, higher than estimated in the US and the European Union (EU), and lower for all but the Asian economies.

The question is why inflation is being discussed when consumer price indices in the US and EU are stable, and what effect these discussions have on international interest rates.

To counteract the inflations produced by these causes, central banks are preparing to readjust interest rates, which are currently at their lowest real levels in decades.