Home World News Developed Economies Oxfam criticizes G7’s global minimum tax as ‘far too low’

Oxfam criticizes G7’s global minimum tax as ‘far too low’

Representatives pose for a group photo during the meeting of the Group of Seven (G7) foreign and development ministers at Lancaster House in London, Britain, on May 4, 2021. (Andrew Parsons/No 10 Downing Street/Handout via Xinhua)

The British nonprofit Oxfam is condemning the G7’s global minimum tax for digital corporations as unfair and too low.

The G7 finance ministers agreed on Saturday to make big tech companies like Apple and Google pay at least 15-per-cent taxes worldwide, in what was touted as a major step towards a global tax reform.

However Oxfam’s executive director Gabriela Bucher responded that the G7 “are setting the bar so low that companies can just step over it,” adding that it will “do little to end the damaging race to the bottom on corporate tax and curtail the widespread use of tax havens.”

“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,” Buchers said.

In addition to being “far too low,” she said the tax was unfair as it would largely benefit G7 states, where many of the big companies are headquartered, at the expense of poorer nations.

Many of the large corporations to be taxed are based in G7 states – Britain, Germany, France, Italy, Japan, Canada and the United States.

According to the plans, the internet giants should also pay taxes where they do business – and not only where their headquarters are located. In Ireland, for example, the tax rate for these companies is currently 12.5 per cent.

The rules would apply to international firms with a profit margin of at least 10 per cent, and 20 per cent of the profit above that margin would be taxed in the country where it was made.

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