US Treasury Secretary Janet Yellen and Germany’s Treasury Secretary Olaf Scholz pose together at a meeting of finance ministers from all G7 countries ahead of the G7 heads of state and government summit at Lancaster House in London, Great Britain, Jan. [Photo/Agencies]
In their joint statement published on Saturday, the finance ministers and central bank governors of the G7 as well as the leaders of the International Monetary Fund, the OECD, the Eurogroup and the Financial Stability Board as well as other international organizations have their unanimous support for a global minimum corporate tax of 15 percent.
If this consensus can be turned into binding practice, the race for the lowest tax rate competition between countries will be over.
Then the multinationals will count the days left in which to avoid taxes and the global supply chains will be reshaped, which will have a profound impact on the world economy.
It is rising national debt in developed economies that has led those who previously argued that government should not interfere with the real economy, change their minds and take on more social responsibility from the richer multinationals
In 2019, for example, corporation tax accounted for only 3.91 percent of total tax revenue in the United States, 4.93 percent in France and 4.56 percent in Italy, and corporation tax in the United States was just 0.96 percent of the gross amount Domestic product, while the national deficit was about $ 3 trillion.
To raise money for their expensive bailout plans, developed economies have jointly targeted multinational corporations. While this can help them ease their funding pressures, it will also affect the distribution of global factors of production and inevitably affect the developing countries participating in the world market, especially those that have attracted foreign companies with low tax rates.
Multinational corporations from developing and emerging countries such as China and India will also have to take preventive measures to cushion the effects of the global corporate tax reform on them.