Daily Management Review

Historic Corporate Tax Deal Approved By G20 Leaders


Historic Corporate Tax Deal Approved By G20 Leaders
The leaders of the twenty largest economies of the world have agreed to a worldwide deal that would see huge corporations' earnings being taxed at a rate of at least 15 per cent.
This new global corporate tax regimen comes as a result of concerns that multinational firms are re-routing their earnings and profits to low-tax nations to avoid paying higher taxes.
All of the leaders that attended the G20 conference in Rome agreed to the deal.
Also on the agenda of the summit are climate change and Covid-19. This is also the first face-to-face meeting of the leaders since the outbreak of the Covid-19 pandemic.
However, leaders of two important countries of the G20 group, which comprises 19 nations and the European Union, are not attending the summit physically - China's President Xi Jinping and Russian, President Vladimir Putin, who have opted to participate via video conference.
According to a report by the news agency Reuters, it is expected that the historic global corporate tax proposal which was proposed by the United States, would be formally adopted by the G20 leaders on Sunday and be implemented by 2023.
According to US Treasury Secretary Janet Yellen, this historic corporate tax agreement is a "vital moment" for the global economy and will "stop the harmful race to the bottom on corporate taxation."
The new tax regimen will benefit US firms and workers despite the fact that many US-based mega-companies will have to pay more tax, she stated on Twitter. The G20 meeting takes place ahead of the highly anticipated COP26 climate change conference in Glasgow, which begins on Monday.
With strong disagreements between countries on their obligations to combat climate change, what occurs at the G20 might set the tone for COP26.
At the start of the two-day G20 conference, a message of unity to world leaders was delivered by Mario Draghi, Italy's prime minister, who said that "going it alone isn't a viable choice. We must do everything possible to overcome our differences "..
More dismal predictions for the future are being issued by experts without immediate action to reduce carbon emissions.
UK Prime Minister Boris Johnson told the BBC that climate change is "the greatest challenge to civilization," with a "risk of civilization basically going backward."
He did however admitted that neither the G20 nor the COP26 meetings would be able to stop global warming, but that they might "restrict the rise in the temperature of the earth" if the correct steps were taken.
According to the Reuters news agency, a draft communiqué underlines the G20's commitment to work toward reducing global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), stating that it "will need substantial and effective efforts by all countries."
The draft also emphasizes the need for "developed countries to mobilize $100 billion (£73 billion) annually from public and private sources through 2025 to address the needs of developing countries" in order to combat climate change - a promise that richer countries have failed to keep since 2009, according to the draft.