G7 nations to raise tax for multinational tech giants

Britain, Canada, France, Germany, Italy, Japan and the United States are planning to squeeze more tax from multinational tech giants. Among their targets are Apple, Microsoft, Amazon, and Google. The rich nations are seeking to set the global tax rate for these companies at 15%.

The plan is initiated by US President Joe Biden who is seeking to raise corporate tax for companies that have been building lucrative markets in the nation. The global pandemic also hit the economy hard, and this situation only pushes governments even further to act. 

Tech giants mentioned above are known for their tax issues. In Ireland, Microsoft did not pay any corporate tax on their $315 billion profit last year. The profit they made in 2020 alone accounts for about a third of the whole country’s GDP. Meanwhile, Amazon just won a court battle over €250 million or about $302 million in taxes they had been ordered to pay in Luxembourg.

According to British Finance Minister Rishi Sunak, the G7 finance ministers have reached an agreement to reform the global tax system “to make it fit the global digital age.” German Finance Minister Olaf Scholz described this historic moment to be a “bad news for tax havens around the world.”

United States Treasury Secretary Janet Yellen stated that the G7 summit was commenced by President Biden to embrace US allies after Donald Trump alienated them. The ministers also agreed to push companies to declare their environmental impact in a more standard way so investors can decide more easily whether to fund them or not.

Among the G7 nations, there is a move to use the phrase “at least 15%” to show both the commitment to and also room for negotiation for this year’s G20 summit which will be held in Italy.