(Center Square) – The proposed global minimum corporate tax has been approved by 130 countries, but some prominent countries are currently refusing to support the plan.
In June Treasury Secretary Janet Yellen and other G7 Treasury Ministers agreed on a minimum global corporate tax rate of 15%. The proposal was broad and required that corporate taxation should not depend on where the service is used, not where it is.
In a statement last week, Yellen announced broad support for global corporate tax proposals.
“Today’s approval from 130 countries, which account for more than 90% of global GDP, is a clear sign. The race down is a step towards the end, ”said Yellen. “Instead, the United States will be in the competition we can win. You were measured by the skills of our employees and the strength of our infrastructure. “
The nine countries of the Organization for Economic Co-operation and Development that did not support the proposal included three from the European Union, Estonia, Hungary and Ireland. The lack of support from some EU Member States is despite the fact that EU Economic Commissioner Paolo Gentiloni took part in negotiations on the first framework last month.
Other countries that did not support the initiative are Barbados, Kenya, Nigeria, Peru, Sri Lanka, St. Vincent and the Grenadines.
Peter St. Onge, economic policy researcher at the Heritage Foundation, believes that other countries will eventually sign the agreement.
“These three European countries – that is, the model for something like this will probably be negotiated in Brussels. You are likely to give and receive a variety of factors, ”St. Onji said. It was.
He added that reluctance from non-EU countries would not affect tax proposals.
“As for the other six countries, it’s not that important to the agreement itself,” said St. Onji. “Historically, when signing such a treaty, there are always some countries that do not sign, like the OECD and [International Monetary Fund] You have to punish the country and get them on board. They start with sugar, punish them later, and try to keep it friendly at first. “
The proposal itself is inherently controversial, as some experts fear that increasing global corporate taxes will do more harm than good to the US and the world economy.
“In general, corporate tax is absolutely one of the worst for economic growth. It reduces investment, reduces job creation and usually increases customer prices, ”said St. Onge. I’m going. “That’s why the tax is paid several times at some point. Therefore, up to 100% of the tax can be borne by employees, consumers, shareholders and of course almost everyone involved in the company. You can. Then the tax actually rises. “
Despite the concerns of critics, the proposal is seen as a way for the Biden administration to continue raising corporate tax rates without worrying about other major nations falling below the United States.
“General mood [Biden’s] Let the side of the aisle go on, ”said St. Onji. “One of the compulsions of this type of tax increase is the competition abroad. So if you lock the door, you can do a lot with cattle. “
Global minimum corporate tax encounters resistance | National news
Source link Global minimum corporate tax encounters resistance | National news