Global minimum tax, the OECD towards a lowering agreement: the developing countries will lose us, celebrates Ireland. Oxfam: “Made by the rich for the rich”

Global minimum tax, the OECD towards a lowering agreement: the developing countries will lose us, celebrates Ireland. Oxfam: “Made by the rich for the rich”
Global minimum tax, the OECD towards a lowering agreement: the developing countries will lose us, celebrates Ireland. Oxfam: “Made by the rich for the rich”

The agreement on the global minimum tax that the 140 Member States ofOECD will formalize on Friday, after long negotiations conducted without transparency, and that at the end of October it should get the final go-ahead at the summit of leaders G20 in Rome. To lose ourselves, shows an analysis conducted by Oxford University e Oxfam, will mainly be the developing countries. Who risk, after taxing the small part of profits which will be “distributed” among the countries where the multinationals make their revenues, to find themselves in the cash register less than they collect today with their web or digital tax. On the other hand, it is the rich countries and those that prosper thanks to tax competition, that is, by offering favorable rates to large groups, celebrating. It is no coincidence that the Irish government, which in July together with Hungary ed Estonia he had not agreed to sign, now he has given the green light – Tallinn has done the same – claiming to have received “reassurance”On the possibility of continuing to ask only 12.5% to companies with revenues under 750 million. And also receiving the compliments of the EU commissioner Paolo Gentiloni (“Epochal step”).

“The initiative started to make multinationals pay their fair share will have the opposite effect“, The economist warned Joseph Stiglitz during an online conference organized byIndependent commission for the reform of international corporate taxation. For Oxfam, the result will be to “increase inequalities and deny developing countries the revenue that could put them on a path of more equitable recovery, in the midst of the greatest increase in extreme poverty in decades ”.

The first pillar and losses for poor countries – On the table of the OECD ministerial there were the mechanisms to translate into practice two “pillars“Provided for by the draft signed in June by G7 and in July from G20. The first concerns the redistribution of the “right to tax” among all the countries in which a multinational operates and impacts only on multinationals with global turnover over 20 billion and profits exceeding 10% of revenues (conditions in themselves a lot restrictive, respected according to Oxfam by only 67 corporations). A share “between 20 and 30%”Of profits beyond that threshold will be taxed in countries where the company generates revenues of at least 1 million a year. The meeting of these days was called to establish the precise quota. The decision will be raised on Friday, but Oxfam and Oxford have already calculated that in any case the 52 developing countries in the most favorable hypothesis will gain little or nothing. While they will be forced to give up the proceeds (1.6 billion dollars) deriving from the taxes on digital services, already applied to multinationals in Brazil, India, Indonesia and Turkey among others.

If the reallocation concerns only 20% of the profits they will even lose us (230 million dollars) and with 30% they will earn only 494 millions equal to 0.007% of their GDP. “The rulers of developing countries come forced to choose between something negative and something worse ”, commented the Argentine Minister of Economy Martin Guzman during an online conference organized byIndependent commission for the reform of international corporate taxation.

The minimum rate will be 15%: Dublin wins – As for the second pillar, the establishment of aeffective global minimum rate, the bar had already been lowered in June from 21% initially proposed to “at least 15%“. A “scandalous” rate, the French economist commented Thomas piketty. But the drop point is even worse: according to the rumors circulated in recent days from Dublin, during the latest negotiations it was agreed to remove the “at least”. We will stop at 15%, less than what any employee pays and very little more than the subsidized rate of 12.5% ​​in Ireland, which has attracted hundreds of multinationals to the small country, including Apple, Google, Amazon e Facebook. “We made sure the ‘at least’ was removed from the text. This will give certainty to the government and industry ”, celebrated the Minister of Finance Paschal Donohoe. “On the other hand, the vast majority of businesses in Ireland will be out of reach of the agreement and there will be no changes to their rate ”.

For Stiglitz, former chief economist of the World Bank, the result will be deleterious and will trigger a new race to the bottom: “If you announce a global low of 15%, I fear that will become the maximum“. And even in this case there is a serious problem of distribution of proceeds: more than two thirds of the revenue will end up in the exchequer of G7 and EU countries, while according to Oxfam’s calculations the poor countries that account for more than a third of the world population will see only 3% of revenues.

Developing countries “pressed” to join them – “It is certainly progress that 140 countries agree on the redistribution of global profits for tax purposes”, concedes Mikhail Maslennikov, which for Oxfam follows the dossiers relating to fiscal justice and socio-economic inequalities, “but the redistributed portion will be residual and the distributional impacts very limited. We need at least some graduality in the transition to this new formula from national web taxes, of which the agreement prohibits the application to all multinationals and not only to those involved in Pillar 1. Because developing countries must give certain revenue to switch to this source of revenues not certain? “. As for the second pillar, the global minimum rate, “will be possible deductions such that it will easily drop below 15%. And the bulk of the extra revenue will go to the countries of residence of the multinationals ”. This is because a multinational that gets to pay very little in a tax haven – inside or outside the EU – will have to pay what is missing to get to 15% to the nation where it has its headquarters: in most cases it is the United States and to an extent much less is the EU and developed Asian states.

On balance, according to Oxfam it is a agreement “made by the rich, for the rich”. The poor countries, which will remain almost dry-mouthed, have been put under pressure to get them to sign. Like? For example waving the bogey to confine them in the European blacklist of tax havens. The non-governmental organization, in a note, “condemns the bullying of OECD countries against the less developed ones conducted through threats of trade sanctions and black lists “. And he hopes that the freedom not to adhere to one or both pillars will be left to states that consider them harmful to their economy.

PREV Sea, mountain or countryside? What you choose reveals something about you
NEXT the lava destroys part of La Laguna, which flows ever closer to the sea – PHOTOS and VIDEO