G7 debates on global tax deals

Photo: AP Rishi Sunak (left) and Janet Yellen

The finance ministers o the world wealthiest countries are set to agree on taxation of technological conglomerates and at the same time mull a global minimum corporate tax at a two-day meeting in London, BBC reported. UK financial minister Rishi Sunak expressed optimism over the on-going talks related to the global digital taxation. The positive outlook comes after US earmarked puntitive tariffs on EU goods but soon later suspended them to allow the talks to continue.

Ahead of the G7 talks, starting in London on Friday, finance ministers from Germany, France, Italy and Spain co-signed a letter urging an agreement on an international tax system "fit for the 21st Century". US Treasury Secretary Janet Yellen is expected to push for the global minimum corporate tax initiative on top of urging G7 countries to increase their support for global vaccination programmes citing that the needs of these initiatives were still highly unmet. She stated, “A rapid and truly global vaccination programme is the strongest stimulus we can provide to the global economy.”

In a letter to The Guardian,they wrote: "Introducing this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be all the more necessary coming out of it." Sunak said he expected to push for an agreement on taxes and call for all global businesses to commit to climate reporting. Speaking ahead of the G7 meeting, Sunak said: "Securing a global agreement on digital taxation has also been a key priority this year - we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners. "I'm determined we work together and unite to tackle the world's most pressing economic challenges - and I'm hugely optimistic that we will deliver some concrete outcomes this weekend." The ministers will be looking at how to stop the likes of Google, Amazon, Starbucks and Apple paying low or no taxes in countries where they generate revenues. The meeting is being held as it emerged that an Irish subsidiary of US technology giant Microsoft paid no corporation tax on $315bn in profit it made last year.

All G7 countries have supported a proposal from the US for a global minimum corporate tax rate of 15% that could raise $50-$80bn for governments around the world. Germany, France, Italy and Spain said the commitment to a minimum 15% tax rate is "a promising start".

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