The International Monetary Fund (IMF) and France’s finance minister joined a chorus of support for the adoption of a global minimum corporate tax on Tuesday, saying an agreement on international taxation “is now within reach”.
The US wants the G20 to agree on such a tax to end what Treasury Secretary Janet Yellen called a “race to the bottom” on taxation as companies stash profits offshore to avoid higher rates in their home countries.
“We are delighted by the US support for a minimal corporate tax,” French Finance Minister Bruno Le Maire told AFP.
“An agreement on international taxation is now within reach,” he said.
The IMF’s top economist said the fund has long supported a global minimum tax.
“We are very much in favour of a global minimum corporate tax,” chief economist Gita Gopinath told reporters on Tuesday. “It is a big concern of ours.”
Speaking at the start of the spring meetings of the IMF and World Bank, Gopinath warned of a “large amount” of tax avoidance and also “countries sending money to tax havens”.
“That’s reducing the tax base on which governments can collect revenues and do the necessary social and economic spending that’s required.”
She said government spending will still be needed to ensure countries recover from the damage inflicted by the Covid-19 pandemic.
Finance ministers of the G20 club of large economies are expected to discuss the proposal during a virtual meeting on Wednesday hosted by Italy.
A Treasury official told reporters the G20 goal is to have a proposal on the global minimum tax by July. The Biden administration could, if needed, change its legislation to bring the US minimum tax into line with the international plan.
Le Maire said France also hoped to make progress with Yellen on a global digital tax agreement this summer.
The tax would target US internet giants such as Google, Amazon, Facebook and Apple (known in France as GAFA), which have long been accused by France of exploiting loopholes to minimise their tax bills.
(FRANCE 24 with AFP)