And where governments, scrambling to fund new roads, schools and hospitals for growing populations, raise taxes on individuals.

It's a depressing scenario, but one that big-four accounting firm KPMG predicts is imminent.

In fact, the future is already here. It's one where tax bases are rapidly diminishing and where revenue authorities battle it out for a greater piece of the pie.

Disputes between revenue authorities have been a feature of the global tax system for more than 100 years.

It's just that, in the new tax world – where governments seek to make multinationals such as Google and Facebook pay tax in the destination where their goods and services go – fights about who taxes what will ramp up.

If there are no more Cayman Islands and Bermuda tax havens, then hundreds of billions of dollars of revenue may now be up for grabs. (The Organisation for Economic Co-operation and Development conservatively estimates that, globally, up to $US240 billion ($314 billion) in revenue is lost annually due to tax avoidance.)

As one-time advisor to former prime minister Tony Abbott and well-known lobbyist Mark Textor told Fairfax Media: "We are entering the period of tax wars instead of trade wars."

This, KPMG says in its report, 2025: people, economy and the future of tax, will be of substantial disadvantage to Australia, which relies heavily on taxing the profits of big miners such as BHP Billiton and Rio Tinto.

"Countries receiving the goods are not happy with the taxing of profit associated with those goods," leader of KPMG's Australian Tax Centre, Grant Wardell-Johnson, says.

"Depending on how certain technical proposed changes are interpreted by the Chinese and Indian revenue authorities, Australia could find a diminished corporate tax base from its major exporters with more of their profits being taxed by overseas revenue authorities."

The financial loss to Australia? "It's easily in the billions," Wardell-Johnson says.

The only way to avoid such a dire scenario would be if governments of those countries came to some sort of consensus on who had taxing rights and avoided double taxing companies.

While that may happen in some cases, it's likely to go the other way. Governments will also have to fight for revenue from digital players.

As KPMG simply puts it, the questions revenue authorities will now have to ask themselves is: "Is the value of the trademark associated with this handbag located in Switzerland, where the intellectual property is registered, or in Shanghai, where the bag is sold?"

Or when it comes to international transfer pricing rules – which have long been a complex legal nightmare for even the greatest technical tax minds – the ability to determine an "arm's length price" will be harder than ever.

At the same time, revenue will be lost as the "gig economy" – using independent workers for short-term engagements – grows.

KPMG rightly predicts it will diminish our personal income tax base.

Unless Australians can provide highly skilled workers in areas such as engineering and architecture, what's to stop Australians seeking the skills of lower-cost workers in Asian countries?

The end result of diminishing tax bases? Governments worldwide introducing domestic laws to protect their own tax bases.

It's already happening. Australia now has tougher anti-avoidance laws, following the lead of Britain, which was the first to introduce a so-called Google tax.

And India's moved on digital transactions by players such as Google and Facebook via its Equalisation Levy, a 6 per cent tax on digital supplies.

But there are limits to governments being able to slap more taxes on multinationals. And, at the same time, more governments will lower rates to become more competitive.

KPMG says, in this world, governments will be forced to hike some taxes on individuals. Expect to see see significant increases in "sin" taxes on gambling, tobacco and alcohol. Property taxes, specifically land taxes, will also rise. And there will be increased user-charges such as congestion levies and more international emissions trading schemes or carbon taxes.

It seems the future world is one where Australia, and Australians, lose out.

Of course, it doesn't have to be. Australia has a chance to turn this around.

Instead of digging up resources and shipping them off overseas, we can value-add. We can start to develop our own industries, our own IP, our own skilled workforces.

Malcolm Turnbull has started the process with his $1.1 billion national innovation plan. Now he just needs to sell it, so all of us can all believe in it.