PARIS, June 28 (Reuters) – A G7 proposal for a global minimum tax rate of 15% is too low and a tax rate of at least 21% is required, Argentina’s finance minister said Monday, spurring some developing countries to strike for a better deal their economies.
The finance ministers of the Group of Seven Wealthy Nations agreed earlier this month to support a minimum global tax of at least 15% in the ongoing international negotiations. Continue reading
“The rate of 15% is far too low,” said Argentine Finance Minister Martin Guzman to an online panel of the Independent Commission for the Reform of International Business Taxation.
“We advocate more than 15%, certainly no less than 21% and 25% would be even better,” said Guzman.
Almost 140 countries are due to attempt Wednesday and Thursday to reach consensus on a global minimum corporate tax and new rules for taxing cross-border trade before the deal is sent to G20 finance ministers for approval in July.
Ahead of these talks, however, officials who have been briefed on the situation say that significant divergences still need to be overcome for a clear consensus to emerge this week.
“The proposed minimum rate would not do much good for countries in Africa and will likely continue to erode the (tax) base for African countries,” said Mathew Gbonjubola, Nigeria’s director of taxation policy, at the same conference.
A minimum rate of half the Nigerian prime rate of 30% risked missing the target of deterring multinational corporations from posting profits in low-tax countries at the expense of the countries where the profits were made, Gbonjubola said.
Guzman, who will be attending the G20 finance ministers ‘meeting next month, said not only is the proposal on the minimum tax rate too low, but current proposals to share governments’ rights to tax the cross-border profits of the largest multinationals are problematic.
“There is a significant risk that developing countries will generally not generate any additional income,” said Guzman.
Reporting by Leigh Thomas Editing by Paul Simao
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