Daily Management Review

G20 finance ministers back US idea of a single minimum tax for businesses


G20 finance ministers have tentatively backed the US Treasury's idea of a uniform minimum tax rate for businesses worldwide. They plan to reach consensus on the new rules by mid-year.

According to Bloomberg, G20 finance ministers and central bank governors said they intend to "reach a global and consensus-based decision" on the minimum tax threshold for businesses by mid-2021. 

French Finance Minister Bruno Le Maire, speaking to the agency, said the authorities were ready to raise the rate above 12.5 per cent. Irish Finance Minister Paschal Donohoe, for his part, said that the size of a country's economy should be taken into account when introducing any new rules. He said that the Irish government may have "quite strong" objections to the idea of a flat corporate tax, but they still "want to hear all views on it". A spokesman for the Swiss State Secretariat for International Finance said that any minimum international tax rate should be "moderate".

The day before, Yellen's proposal was also supported by Gita Gopinath, chief economist at the International Monetary Fund. She said the organisation had long advocated such a threshold, noting that tax evasion was a serious problem for the global economy.

Janet Yellen made a proposal to introduce a single minimum threshold for corporate taxes on April 5. She said that over the last 30 years countries have been reducing corporate tax rates in an effort to attract multinational corporations. However, she said, governments should have "stable tax systems that generate sufficient revenue to invest in basic public goods".

source: bloomberg.com