CTOs should understand these developments to anticipate and even influence the potential effects on the business.
To help businesses navigate these choppy waters, tax leaders should understand how geopolitical trends might play out, what threats might arise and how they can be mitigated. Many companies are taking steps to manage their exposure by scenario planning so they can chart their best course forward. Tax leaders are essential in these endeavors as they shed light on the tax angles of the strategic decisions being made.
Three significant trends are reshaping the global business landscape and creating uncertainty. First, the international order is splintering, and governments are now prioritizing safety and security over measures to promote prosperity and growth. Second, international tax is a rare area where multilateral collaboration continues, with consensus being forged for fairer, more efficient tax rules. The consensus is fragile, however, and significant divisions still need to be bridged. The third trend is that income inequality is worsening globally, leading to distrust of politicians and governments.
These developments will have implications for tax policy, and being up to speed on them can help put CTOs in the best position to steer their organization’s response. For example, how are professional peers, advisers, academics, and NGOs engaging on emerging issues, social currents, and political trends?
Tax authorities and policymakers must engage in tax policy debates with commercial leaders to ensure business issues are heard. At the same time, the C-suite and senior management must explain the sources of tax risk and highlight opportunities. Consider all of this a risk governance framework. This could contribute to business strategy, build team profiles, and assist business sustainability and success.
This article was first published in the Budapest Business Journal print issue of February 21, 2025.
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