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Thursday, June 13, 2024

‘The beginning of a long road’: Global tax reform will take sweat and tears to implement, experts say

  • Finance ministers from the Group of Seven might be congratulating themselves on their deal to agree a 15% minimum global corporate tax rate, but they're already facing criticism.
  • Some say the deal doesn't go far enough and will take a lot of time, coordination and cooperation to conclude.
  • G-7 ministers hailed the deal, agreed in principle, as a milestone in global cooperation on corporation tax following years of discord over the taxation of large multinationals.

Britain's Chancellor of the Exchequer Rishi Sunak (R) welcomes US Treasury Secretary Janet Yellen to the G7 Finance Ministers Meeting at Lancaster House, central London on June 4, 2021.STEVE REIGATE | AFP | Getty Images

Group of Seven finance ministers might be congratulating themselves on their deal to agree to a 15% minimum global corporate tax rate, but they're already facing criticism that it doesn't go far enough and will take much more time, coordination and cooperation to conclude.

G-7 ministers hailed the deal, agreed in principle this past weekend, as a milestone in global cooperation on corporation tax after years of discord over the matter, particularly over the taxation of large multinationals, especially tech giants.

As it stands, the agreement involves only the G-7 members — Canada, France, Germany, Italy, Japan, the U.K., U.S. and the EU — and faces much deeper and likely protracted negotiations.

U.K. Finance Minister Rishi Sunak, who hosted his fellow G-7 ministers for talks in London, said Saturday the ministers had "reached a historic agreement to reform the global tax system, to make it 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."

U.S. Treasury Secretary Janet Yellen said a global minimum rate would end "the race-to-the-bottom in corporate taxation."

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