How low is too low?
Quelle surprise! Campaigners have criticised the G7 finance ministers' agreement on a 15% tax on global companies as being too low, and to the disbenefit of poorer nations. The critics include Oxfam, which earlier this year had its UK government funding suspended only one month after a previous three-year ban had ceased. Perhaps the UK government has a better fiscal grasp than Oxfam.
But aid charities said the agreed rate is too low and would not stop tax havens from operating. "It's absurd for the G7 to claim it is 'overhauling' a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore," said Oxfam's executive director Gabriela Bucher. "They are setting the bar so low that companies can just step over it." She said the deal was unfair as it would benefit G7 states, where many of the big companies are headquartered, at the expense of poorer nations.
Given that the agreement has to be ratified by the G20, which includes India and China, it's not a done deal anyway. Not that they have any interest in fairness, but I'm sure that they'll want a cut of that sweet, sweet moolah.
In my, admittedly fiscally-impaired, view the greater advantage of the agreement is that companies will have to pay more tax in countries where they make sales, rather than where they declare their profits. This is a good thing, even if it benefits India and China.