Finance ministers from wealthy G-7 nations on Saturday pledged to commit to a global minimum corporate tax of at least 15 per cent, rallying behind a US-backed plan.
“We… commit to a global minimum tax of at least 15 per cent on a country by country basis,” said a statement at the conclusion of their London meeting.
The G-7 hopes to reach a final agreement at the July gathering of the expanded G-20 finance ministers group, it added.
“I’m delighted to announce that G-7 finance ministers… have reached a historic agreement to reform the global tax system,” said British finance minister Rishi Sunak, who chaired the two days of talks held in person after an easing of Covid-19 restrictions.
It was attended by counterparts from Canada, France, Germany, Italy, Japan and the United States.
Sunak said the G-7 had agreed to make the global tax system “fit for the global digital age and crucially to make sure that it’s fair so that the right companies pay the right tax in the right places”.
He thanked his counterparts for striking “a deal of historic significance that finally brings our global tax system into the 21st century”.
The landmark move is aimed at getting multinationals — especially tech giants — to pay more into government coffers, which have been severely hit during the pandemic.
The talks have prepared the ground for a broader summit of G-7 leaders in Cornwall, southwest England, starting Friday.
US President Joe Biden is set to attend next week’s summit on his first foreign tour since taking office in January, while later Saturday US Treasury Secretary Janet Yellen will hold a press conference following the G-7 meeting.
Momentum has grown behind the US-led plans to limit the ability of multinationals like tech giants to game the tax system to boost profits, especially at a time when economies around the world are reeling from the impact of the coronavirus pandemic.
German finance minister Olaf Scholz on Friday told reporters it was the “right time” for a global tax deal given the vast sums spent by governments “to protect citizens, stabilise the economy and save jobs” since last year.
Biden had called for a unified minimum corporate tax rate of 15 percent in negotiations with the Organisation for Economic Co-operation and Development and G-20..— Agencies