G7: Meeting in London, the economy ministers of the Group of Seven (G7) countries signed on Saturday (5) an agreement that increases the taxation of the 100 largest and most profitable companies in the world. Global tax reform would ensure that the tax, of at least 15%, is paid in countries where these multinationals operate.
In practice, this means that hundreds of billions of dollars can be raised by the poorest countries, which practically went broke during the covid-19 pandemic.
Currently, most Big Techs and large multinationals have migrated their facilities to countries around the world, where they are exempt or pay very low taxes and send their taxes only to their host countries – when they are not accused of maneuvering to hide part of the profit in transfers to tax havens.
Reactions to the new taxation of the biggest companies
The discussion about the unification of taxation to large companies started more than seven years ago. In Brazil, for example, multinationals like Google and Facebook maintain hundreds of employees, paying negligible taxes. British Finance Minister Rishi Sunak celebrated the deal as “historic for reforming the global tax system to make it fit for the digital age.”
Facebook vice president for global affairs Nick Clegg used his Twitter account to congratulate the G7 on the move. According to him, the agreement “is a significant first step towards certainty for companies and strengthening public confidence in the global tax system.”
The proposal, which aims to reform global fiscal rules dating back to the 1920s, should move forward and consolidate to be presented for approval at the G20 meeting, scheduled for next July. After that, the project goes to the Organization for Economic Cooperation and Development (OECD).