Saturday, 20 April 2024
G7 Countries New Tax Deal

Rich countries Under Criticism Over G7 Tax Deal

Anti-poverty activists on Monday criticized the agreement reached by seven rich countries (G7) to impose a minimum tax on multinational companies, saying it would benefit rich countries at the expense of the poor.

The finance ministers of the Group of Seven’s (G7) developed economies on Saturday agreed to raise the global minimum corporate tax rate to at least 15 percent, aimed at raising more money from multinationals such as Amazon and Google. Their motivation is to stop them to shift profits to low tax offshore shelters.

Oxfam and Eurodad, a network of development agencies, said the new era would make a large portion of the tax in the home countries of large companies, often in the United States or Europe, leaving a much smaller share in poorer states where multinationals also operate. Do “The G7 is a small club of rich and powerful countries,” said Tove Ryding of Euradad. “They are very interested in standing together. They have written an agreement that benefits them.”

“It’s definitely with the rich and it’s unfair on the poor,” said Christian Halom, a tax expert at Oxfam.

He said the scheme was further shaken in the country hosting the company’s headquarters, adding: “It will lead to large-scale remittances to rich countries.”

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Tax Justice Network, a reform campaign group, which also voiced about this unfair agreement.

“While they will pressure many small countries to accept the terms, large countries like India can resist,” Euradad’s Ryding said.

The Organization for Economic Co-operation and Development (OECD), which has helped bring about sweeping tax reform. It has denied the deal, saying it would benefit the United States.

50 billion Euros in taxes from multinational corporations

According to a recent study, the EU could collect an additional 50 billion Euros in taxes from multinational corporations. If a global corporate tax of at least 15% is agreed upon.

New Tax Rules

The proposal is part of a set of tax rules for multinational companies. Where large technology companies such as Alphabet and Facebook, which now pay much lower taxes. Despite the fact that they are getting higher profits. They are saving the amount of higher taxes by setting up offices in Ireland, Luxembourg, Netherlands or lower-tax countries.

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