A high-level UN body on Thursday issued a series of comprehensive recommendations on reforming the global financial system, including the introduction of an international corporate tax rate.
Every year governments lose between $ 500 billion and $ 650 billion in tax avoidance income … [+]
The International Financial Accountability, Transparency and Integrity for Achieving (FACTI) panel said a global corporate tax of 20% to 30% on profits would “help limit incentives against profit shifting, tax competition and a race to the bottom.”
The panel recommends creating a body to collect and disseminate corporate earnings data, where the assets of multinational corporations are located and whose companies own them, and call this data the “bare minimum” necessary to cope with tax avoidance and avoidance at all to start dodging.
According to the panel, the minimum tax should serve as an incentive for “investing in sustainable development with the same high effective taxation”.
The FACTI panel consists of former world leaders and central bank governors, business and civil society leaders, and academics.
Tax avoidance has been a consistent global problem as multinational corporations continue to exploit loopholes or take advantage of tax havens around the world. Every year, governments lose between 500 and 650 billion US dollars in revenue from tax avoidance, as researchers have found. Most of these losses are concentrated in middle- and low-income countries in sub-Saharan Africa, Latin America, the Caribbean and southern Asia. The report found that governments without sufficient tax revenues could not respond aggressively to Covid-19. In India, the money lost through tax avoidance could cover hospital treatments for 55 million people a year, the report said. In Germany, according to the report, this money could be paid for the installation of almost 8,000 wind turbines.
Another recommendation of the panel includes a tax on digital services. France has already introduced such a tax that would hit tech giants like Facebook and Google. The United Nations has called for a tax provision for digital services to be included in the UN tax treaty so that other countries can follow suit.