G7 nations hopeful of ‘historic’ corporate tax deal

6 June, 2021 12:00 AM printer

G7 nations hopeful of ‘historic’ corporate tax deal

Britain's Chancellor of the Exchequer Rishi Sunak (L) and European Commissioner for Economy Paolo Gentiloni pose for a photograph on the second day of the G7 Finance Ministers Meeting, at Lancaster House in London on Saturday. Finance ministers from wealthy Group of Seven (G7) nations are on Saturday expected to announce support for a minimum global level of corporate tax, aimed at getting multinationals -- especially tech giants -- to pay more into government coffers hit hard by the pandemic.

LONDON: Finance ministers from wealthy G7 nations were Saturday expected to formally announce support for a minimum level of corporate tax in a landmark move aimed at getting multinationals—especially tech giants—to pay more into pandemic-hit government coffers.

According to a draft communique seen by AFP, the finance chiefs and central bankers of the world’s seven richest nations will express “strong support” and a “high level of ambition” over the US-backed tax plans, reports AFP.

“If we have an agreement... it will be a historic step forward,” French economy minister Bruno Le Maire told journalists Friday following the first of two days of talks.

It would then be expected to go before the expanded Group of 20 at their finance meeting in July. British finance minister Rishi Sunak was chairing the London meetings, held in person after an easing of Covid-19 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 Friday.

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

Momentum is growing behind the US-led plans to limit the ability of multinationals like tech giants to game the system to boost profits, especially at a time when economies around the world are reeling from the impact of the coronavirus pandemic.

German finance minister Olaf Scholz on Friday told reporters it was the “right time” for a global tax deal given the vast sums spent by governments “to protect citizens, stabilise the economy and save jobs” since last year.

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.

Le Maire told journalists in London that 15 percent is “a minimum. For us, it’s a starting point”.

Along with its G7 and G20 partners, France wants “a more ambitious level of taxation”, the minister said, with the current pandemic crisis showing that “tax evasion, the race towards the lowest possible level of taxation, is a dead end”.

A deal is “within sight”, finance ministers from France, Germany, Italy and non-G7 member Spain have jointly declared this week.