The Global Minimum Tax Deal Could Short-Change Poorer Countries

The Global Minimum Tax Deal Could Short-Change Poorer Countries
Secretary of State Antony Blinken and OECD Secretary-General Mathias Cormann during a press briefing at the OECD Ministerial Council meeting, Oct. 6, 2021, Paris (AP photo by Patrick Semansky).

A new agreement negotiated under the auspices of the G-20 and the Organization for Economic Cooperation and Development aims to crack down on tax havens by subjecting the world’s largest and most profitable multinational corporations to a minimum corporate tax rate of 15 percent. The deal has been agreed by 136 countries and jurisdictions, collectively representing more than 90 percent of the global economy. The OECD is hoping it will become effective by 2023.

Many economists and commentators argue that such a deal is long overdue, given the ability of many gigantic corporations to avoid paying taxes on all or most of their profits by locating their operations in low-tax jurisdictions. But as with all things tax-related, critics contend that the devil is in the details and that the agreement in practice does little to aid lower-income countries.

This week on Trend Lines, WPR’s Elliot Waldman digs into the substance of the agreement with Martin Hearson, a research fellow at the U.K.-based Institute of Development Studies and the International Center for Tax and Development, where he leads the international tax program. He’s the author of “Imposing Standards: The North-South Dimension to Global Tax Politics.”

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Trend Lines is edited by Peter Dörrie, a freelance journalist and analyst focusing on security and resource politics in Africa. You can follow him on Twitter at @peterdoerrie.

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