Corporate tax ‘in sight’ as G7 meets
London, June 4: Group of Seven finance ministers kicked off talks Friday, with optimism growing that the world's wealthiest countries will support US-backed plans for a minimum global level of corporate tax.
British finance minister Rishi Sunak was hosting the meet — held in person after an easing of Covid restrictions and attended by counterparts from Canada, France, Germany, Italy, Japan and the United States.
The talks were preparing the ground for a broader summit of G7 leaders in Cornwall, southwest England starting on June 11, which will include US President Joe Biden on his first foreign tour since taking office in January.
Momentum is building for a minimum level of corporate tax to prevent multinationals like tech giants from playing the system to boost profits.
Corporate tax is one of two pillars in efforts for global fiscal reforms, the other being a “digital tax” to allow countries to tax the profits of multinationals headquartered overseas. “It is increasingly clear that in a complex, global, digital economy, we cannot to continue to rely on a tax system that was largely designed as in the 1920s,” Sunak said in opening remarks.
“And I would just say this: The world has noticed. And I believe they have high expectations for what we all can agree over the coming days.
“Opportunities to make truly lasting reforms like this do not come very often, and I sincerely hope that we seize the moment.” The finance chiefs and central bankers of the world's seven richest nations will express “strong support” and a “high level of ambition” over a minimum global minimum corporate tax rate.
They then hope to reach broader agreement at a G20 finance meeting scheduled for July.
Ministers also plan to commit to “sustain policy support”, or stimulus, for “as long as necessary” to nurture economic recovery, while addressing climate change and inequalities in society, according to the document.
Furthermore, they will urge “equitable, safe and affordable access to Covid19 vaccines” everywhere. The thorny topic of the regulation of digital currencies such as bitcoin will also be on the agenda.
Biden has called for a unified minimum corporate tax rate of 15 percent in negotiations with the Organisation for Economic Co-operation and Development (OECD) and
G20. His proposal has so far won broad support from countries such as France and Germany, as well as the International Monetary Fund. —