Responding to the announcement today that the G7 will back a global minimum corporate tax rate of 15 percent, Gabriela Bucher, Executive Director of Oxfam International, said:
“It’s about time that some of the world’s most powerful economies force multinational corporations, including tech and pharma giants, to pay their fair share of tax. However, fixing a global minimum corporate tax rate of just 15 percent is far too low. It will do little to end the damaging race to the bottom on corporate tax and curtail the widespread use of tax havens.
“It’s absurd for the G7 to claim it is ‘overhauling’ a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore. They are setting the bar so low that companies can just step over it.
“In a world beset by a pandemic, at a time of such desperate need, the G7 looked at corporate balance sheets bursting at the seams with over-inflated profits ―and immediately looked away. The G7 has failed to help pave the pathway to refilling Covid-wracked government coffers and supporting people all around the world with the promise of better public services and jobs and future opportunities. The G7 had the chance to stand alongside taxpayers. They chose instead to stand alongside tax havens.
“Stopping the explosion in inequality caused by Covid-19 and tackling the climate crisis will be impossible if corporations continue to pay virtually no tax. Ending the damaging race to the bottom on corporate tax and curtailing the widespread use of tax havens requires a truly ambitious global minimum effective tax rate. President Biden’s 21 percent while far from enough was the highest rate proposed, and some European countries, in hock to their own home-grown tax havens, fiercely defended an even cheaper rate, below 15 percent.
“This is not a fair deal. As it stands, this top-down tax pact brokered by just seven countries, ahead of the global deal expected by this summer, will overwhelmingly benefit rich countries and increase inequality. Billions of dollars in revenues lost to tax havens each year would flow to wealthy countries where most of the large multinationals like Amazon and Pfizer are headquartered ―regardless if their sales and profits are actually made in developing nations. The G7 can’t expect the majority of the world’s countries to accept crumbs from its table.”
Notes to editors
Leading economists and civil society organizations, including the Independent Commission for the Reform of International Corporate Taxation (ICRICT), are calling for a global minimum corporate tax rate of 25 percent.
In May 2019, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) launched a new stage of tax reforms to address international tax avoidance by multinationals in the digital era. Nearly 140 countries are participating in the negotiations. The reform package includes two pillars, the first on distribution of taxing rights and the second on a global minimum corporate tax rate. The G20 is expected to reach a political agreement in July 2021.
Developing countries, which generally have higher nominal corporate tax rates, have presented numerous proposals as part of the OECD/G20-led negotiations. A few weeks ago, on behalf of 38 African countries, the African Tax Administration Forum (ATAF) submitted a proposal to address global inequalities in the distribution of taxing rights. The G24 has also submitted detailed proposals during the course of the negotiations, calling for a fairer tax system.
Contact information
Annie Thériault in Peru | annie.theriault@oxfam.org | +51 936 307 990
For updates, please follow @Oxfam
Please support Oxfam's Coronavirus Response Appeal.
Leading economists and civil society organizations, including the Independent Commission for the Reform of International Corporate Taxation (ICRICT), are calling for a global minimum corporate tax rate of 25 percent.
In May 2019, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) launched a new stage of tax reforms to address international tax avoidance by multinationals in the digital era. Nearly 140 countries are participating in the negotiations. The reform package includes two pillars, the first on distribution of taxing rights and the second on a global minimum corporate tax rate. The G20 is expected to reach a political agreement in July 2021.
Developing countries, which generally have higher nominal corporate tax rates, have presented numerous proposals as part of the OECD/G20-led negotiations. A few weeks ago, on behalf of 38 African countries, the African Tax Administration Forum (ATAF) submitted a proposal to address global inequalities in the distribution of taxing rights. The G24 has also submitted detailed proposals during the course of the negotiations, calling for a fairer tax system.
Annie Thériault in Peru | annie.theriault@oxfam.org | +51 936 307 990
For updates, please follow @Oxfam
Please support Oxfam's Coronavirus Response Appeal.