Growing demands for fair tax
After years of widespread campaigning, the global consensus on tax has also begun to shift. In June 2021, the G7 group of countries agreed a landmark global tax rate, meaning that companies will have to pay at least 15% tax in any country where they operate, and 20% tax on profits over 10%. The agreement is a major step towards global action on tax avoidance - but now more than ever we need to keep up the pressure for change.
The G7 agreement only includes 7 countries, with major tax havens like Ireland and Switzerland not on the list. Many details are left to be decided - which will majorly impact the revenue actual raised by changes - at wider negotiations being conducted amongst 139 countries at the OECD in Paris.
Meanwhile Gabriela Bucher, Oxfam’s executive director, has pointed out that the 15% rate would benefit G7 states, but is too low to benefit poorer countries.
"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. They are setting the bar so low that companies can just step over it."
Indeed, it’s unclear whether some of the new tax measures would even capture Amazon’s billions of dollars in sales. The second agreement focuses on taxation over 10% profit: however, Amazon shifts its profit through time as well as space, booking a loss in many places while multiplying its monopoly and share value, meaning that it may not come under new rules that focus on profit.
Consumer and other campaign pressure is needed to ensure that companies address their own tax avoidance; that global tax rates benefit poorer countries too; and that global tax rules don’t leave loopholes for Amazon to exploit.
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