Following the two days long session at Lancaster House in London, the ministers from all seven countries, including Franc, Germany, Canada, Italy, Japan, UK, and the US, have concluded on the corporation tax numbers fixing the rate to 15% at the lowest. The decision will help to regulate the major corporation tax structures and will enable them to keep a record of taxes wherever these companies operate, ensuring fair tax pay even in the countries where they record sales.
This is a historic step in the global taxation system as the G7 ministers have come to agree on imposing taxes after years of discussions and meetings highlighting the issue. The changes will mean that companies with a high online presence worldwide, such as Microsoft, Google, Facebook, and Amazon, among others, will need to pay taxes in all the major areas of operations, which is a good step considering that the right institutions will pay taxes at the right time to the right place.
A treasury spokesperson explained further that the agreement means that the big companies operating in various parts of the world pay taxes to all the operating bases, unlike earlier, when the companies were only required to pay taxes solely in the country where its headquarter was situated.
The agreement will be discussed in particular at the G20 finance ministers and Central Bank governor’s meeting lined up for July this year. Joe Biden had at first called for a 21% minimum corporation tax, which was estimated to raise a healthy sum of £131 million for public services within the states. Rachel Reeves, a shadow chancellor, was reported stating that the governments should now lead and impose a 21% tax rate and use the collected sum for the betterment of education and healthcare.
There have been multiple discussions on increasing and imposing taxes on multinational corporations, and after all these years at this G7 summit, a minimum 15% rate for corporates has been agreed upon, making it a historic agreement among the members of the committee. Although Joe Biden administration was rooting for a much higher tax rate structure, it did not seem viable to increase the taxes to this extent, and the ministers from across nations agreed to a bare minimum of 15%, which will be a great step for better healthcare, better schooling, and higher developmental projects, by the government.