G7 FMs pledge 15% global corporate tax

Hope to reach final deal at the July gathering of G20 group

London, June 5: Finance ministers from wealthy G7 nations on Saturday pledged to commit to a global minimum corporate tax of at least 15 percent, rallying behind a US-backed plan.

“We... commit to a global minimum tax of at least 15 percent on a country by country basis,” said a statement at the conclusion of their London meeting.

The G7 hopes to reach a final agreement at the July gathering of the expanded G20 finance ministers group, it added.

“I’m delighted to announce that G7 finance ministers... have reached a historic agreement to reform the global tax system,” said British finance minister Rishi Sunak, who chaired the two days of talks held in person after an easing of Covid-19 restrictions. It was attended by counterparts from Canada, France, Germany, Italy, Japan and the US.

The landmark move is aimed at getting multinationals — especially tech giants — to pay more into government coffers, which have been severely hit during the pandemic.

The talks have prepared the ground for a broader summit of G7 leaders in Cornwall, southwest England, starting Friday.

US President Joe Biden is set to attend next week’s summit on his first foreign tour since taking office in January, while later Saturday US Treasury Secretary Janet Yellen will hold a press conference following the G7 meeting.

Momentum has grown behind the United Statesled plans to limit the ability of multinationals like tech giants to game the tax system to boost profits, especially at a time when economies around the world are reeling from the impact of the Coronavirus pandemic.

Biden had 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.

French economy minister Bruno Le Maire had told journalists in London that 15 percent is “a minimum. For us, it's a starting point”.