The Estonian finance minister, Keit Pentus-Rosimannus, has spoken out against proposals for a global corporate tax, describing them as “harmful to business, international competition and job creation”.
The G7 heads of state and government agreed on Sunday on a global corporate tax of 15% for companies, regardless of their location. The long-awaited reform aims to end competition through low tax rates in the hope of attracting corporate giants.
Initial reactions to the new tax rate have been positive, including from digital giants such as Google and Facebook. However, Estonia did not show the same level of enthusiasm, although estimates suggested the proposal will bring the country an additional € 10 million in tax revenue.
The program restricts tax competition and tax policy decisions between different countries, Minister Pentus-Rosimannus of the liberal market reform party told ERR News on Tuesday, adding that it would “narrow” for small countries.
Healthy tax competition “usually promotes growth and innovation,” but now the G7 proposal is “going in the opposite direction,” she added.
Under the Estonian corporate tax system, only dividends are taxed and profits are not taxed when reinvested in a company. In the interview, the minister indicated that the exemptions from the corporate tax system that she had requested in recent years will continue to apply in the future. (Pekka Vänttinen | EURACTIV.com)