Minister of Economy of Argentina Martín Guzmán, the director at the Nigerian Federal Inland Revenue Service Matthew Gbonjubola , representing two countries members of the G-24, a group of countries of the Global South, will discuss how to get a global tax deal fair to the world with leading economists Jayati Ghosh and José Antonio Ocampo both members of ICRICT (Independent Commission for the Reform of International Corporate Taxation). The event will take place on Zoom and journalists will be able to ask questions after the first discussion.
The G-7 have announced an “historic” deal to reform taxation of multinationals to ensure digital giants pay their fair share and introduce a global minimum tax to end the race to the bottom. How “historic” is it? G-7 agreements are being driven by G7 interests first and foremost.
The deal is not over, 139 countries will be meeting at the OECD this week to discuss the final proposal to be presented to G20 Ministers of Finance in 8-10 July and will have a say on the final deal.
A global agreement needs to reflect the interests of all countries. G-24 has been articulating constructive alternatives together with other bodies representing developing countries and their interests. A deal is only fair if it takes their voices into account. G-7 has spoken, now is time for the rest of the world to speak.
When: The virtual press conference will be held on Monday, 28 June, 9.45-11am EST (Washington DC), 10.45-12pm (Buenos Aires), 2.45 pm-4pm (Abuja), 3.45pm-5pm CET (Paris),
Where: via Zoom. Register here for the press conference. There will be simultaneous interpretation into French and Spanish.
Who: Zainab Ahmed, Minister of Finance, Budget and National Planning, Nigeria, Martín Guzmán, Minister of the Economy, Argentina, Jose Antonio Ocampo, Professor of Economics, Colombia University and ICRICT Chair and Jayati Ghosh, Professor of Economics, University of Massachusetts, and ICRICT Commissioner. The debate will be moderated by Alexandra Haas, Executive Director, Oxfam Mexico
Notes to editors:
Ø Globally, tax avoidance diverts 40% of foreign profits to tax havens, according to ICRICT commissioner Gabriel Zucman. You can explore the world map to see how much profit and tax revenue your country loses (or attracts) here.
Ø A global minimum tax is one of the main recommendations of the Report on Financial Integrity for Sustainable Development - presented last February by a United Nations high-level panel, the FACTI.
Ø A global minimum tax rate close of 21% could generate $640 billion, according to a recent study on the potential revenue-raising effects of the widespread adoption of this measure.
Ø The European Tax Observatory, run by ICRICT commissioner Gabriel Zucman, just considered several scenarios, depending on a range of rates. An international agreement on a minimum rate of 25% - as supported by ICRICT- would allow the European Union (EU) to raise its tax revenues by €170 billion in 2021, an increase of 50% of the corporate tax revenue collected today and equivalent to 12% of total EU health spending. With a 21% minimum rate (Biden’s proposal), the EU would collect about €100 billion more. Moving from 21% to 15% would halve these revenues (to €50 billion).
Ø Multinationals, supported by some economists, claim that a 21% rate would be excessive and would harm developing countries, depriving them of a valuable tool to attract investment. This is a specious argument. Studies show that when a multinational company considers where to locate a production unit, tax advantage does not take pride of place at all on the list of criteria to be considered. In fact, it appears well behind other issues such as the quality of infrastructure, the education of workers, or legal security.
Ø Additional revenue generated by a global minimum tax must be shared equitably between the home countries of multinational companies and the developing countries where the activities – workforce and raw materials – are sourced. The Intergovernmental Group of 24 (G24), a body representing emerging economies, is requesting that, in some circumstances, these economies should have priority in taxing profits shifted to tax havens.
Read our latest report, “The global pandemic, sustainable economic recovery and international taxation”.
MEDIA CONTACT: LAMIA OUALALOU
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ABOUT ICRICT:
The Independent Commission for the Reform of International Corporate Taxation (ICRICT) aims to promote the international corporate tax reform debate through a wider and more inclusive discussion of international tax rules than is possible through any other existing forum; to consider reforms from a perspective of public interest rather than national advantage; and to seek fair, effective and sustainable tax solutions for development.