Monday, March 4, 2024

ECONOMY | 29-06-2021 08:37

Global tax floor of 15% would be ‘too low,’ says Guzmán

Economy Minister Martín Guzmán says Argentina's position is that a global floor of 15 percent for corporate taxation would be “too low.”

Economy Minister Martín Guzmán thinks that a global floor of 15 percent for corporate taxation would be “too low.”

Finance ministers from the G20 will session in Venice next Friday and Saturday to try and reach agreement on a global tax rate which would set a minimum floor, while assigning the profits of multinationals (especially the digital giants) differently to make them taxable for more countries. Earlier this month the G7 approved a tax floor of “at least 15 percent” in response to a call from the United States.

Speaking on Monday, Guzmán said that Argentina felt that proposal should be raised.

“In our opinion, what is being discussed falls well short of what the world needs today to tackle the challenges facing us,” including inequality and climate change, said the minister.

At a teleconference event organised by the Independent Commission for the Reform of International Corporate Taxation (ICRICT), Guzmán indicated that Argentina would be looking for a tax floor in the 21-25 percent range.

“There exists a substantial risk of the floor also becoming the ceiling or at least the feasible ceiling,” Guzmán indicated.

"We need fiscal and structural reforms since we are seeing greater asymmetries between the advanced economies and other countries due to the pandemic. We must advance with norms to resolve those asymmetries," added the minister.

At the close of this week the Organisation Economic Co-operation and Development (OECD) was set to direct the discussions among almost 140 countries towards a global agreement. The G20 will seek to back an agreement emerging from those conversations.

The OECD pointed out that "at world level tax evasion creams off 40 percent of overseas company profits to tax havens."


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