Corporate Tax

International Minimal Company Earnings Tax Fee: A Beginning Level for Extra Ambition

The ITUC has welcomed the agreement of 136 countries on a global tax reform that introduces a minimum global tax rate of 15%, but it must be the beginning of a change in the system so that big corporations pay their fair share.

ITUC General Secretary Sharan Burrow said: “We applaud this long overdue example of multilateralism, but this must be used as a starting point, rather than an aim, to greater ambition to ensure that multinational corporations pay their fair share of taxes.

“A minimum of 15% is too low, it will slow the race to the bottom in corporate taxes and deal a heavy blow to tax havens, but there are too many loopholes in the deal. However, since most countries in the world agree that we need a minimum rate, we need to push for the correct rate, which we believe should be 25%.

“The G20 finance ministers are meeting this week and they need to show the ambition the world needs and go beyond the 15% rate. In our briefing we made it clear why the world needs fair corporate taxation – now the ministers have to deliver.

“And let’s not stop here. World governments must agree on other cross-border tax challenges, such as a tax on the excessive wealth of the world’s richest people and a tax on financial transactions, in order for this sector to make a fair contribution to tax revenues.

“Now is the time to create the financial means to achieve economic and social recovery from the COVID-19 pandemic, provide quality public services, reduce inequality and combat unemployment. To finance this, we need a fair corporate tax.

“So this is a good start, but we have to go further and the people of the world shouldn’t have to wait until the next crisis for everyone to pay a fair, effective tax rate. Most working people pay more than 15% tax, why wait for multinationals and the super-rich to pay their fair share? “

For a further analysis of the tax treaty, read the response of the Trade Union Advisory Committee (TUAC) to the OECD here.

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