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After leaders of the world's 20 major economies, the G20, approved a global agreement, words like "historic" and "landmark" are being used to describe it. And it is as it will an impact worldwide. Although it was a formality, after several rounds of talks over the last few months.
The agreement means that multinational companies operating anywhere in the world will now pay a minimum tax rate of at least 15% in every country. According to an analysis, around 100 companies. After this agreement, many companies, especially tech giants, used to pay taxes where they registered in—mostly low-tax countries. They can no longer do that. (https://www.theguardian.com/world/2021/oct/30/g20-leaders-endorse-biden-global-minimum-corporate-tax)
Countries which have become havens in recent decades, such as Ireland, Barbados, Saint Vincent and Hungary will no longer be attractive for multinationals. Take for instance, Ireland. It earned around USD 16.5 billion in corporate taxes last year, with almost half of it coming from just ten multinationals.
But is it enough? Not everyone is satisfied with the minimum tax. Several economists, including Nobel Prize laureate Joseph Stiglitz and Thomas Piketty, including the Independent Commission for the Reform of International Corporate Taxation (ICRICT) have advocated for a global minimum corporate tax rate of 25 percent.
The Biden administration had tried for a 21% corporate tax rate as minimum but not many countries were willing to go with it and as a compromise, 15% rate was agreed to. But even this is seen as a victory to the U.S. (https://www.aljazeera.com/news/2021/10/31/g20-leaders-endorse-global-corporate-minimum-tax)
The corporate tax deal is "far from fair" says Oxfam, a confederation of charitable organizations. According to Oxfam, the agreed tax would "overwhelmingly benefit" rich countries and increase world 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," said a statement from Oxfam executive director Gabriela Bucher when the G7 ministers finalised the deal a few months back. (https://www.oxfam.org/en/press-releases/g7-global-corporate-tax-deal-far-fair-oxfam)
Read more:
'The historic deal':
https://www.bbc.com/news/world-59101218
How the deal was negotiated:
https://www.theguardian.com/world/2021/oct/30/g20-leaders-endorse-biden-global-minimum-corporate-tax