“Global minimum tax to generate $220 billion”

PARIS: The introduction of a worldwide minimal company tax charge is anticipated to deliver governments $220 billion in further annual income, in accordance with up to date estimates launched on Wednesday.

The Group for Financial Co-operation and Growth (OECD), which backed the worldwide settlement on the reform, stated the quantity was equal to 9 % of world company tax income.

It is a important enhance from the earlier estimate of a $150 billion annual enhance in income from the introduction of a 15 % minimal tax charge.

Greater than 130 nations that make up 90 % of the world financial system agreed in 2021 to present multinational firms the ground to purchase low tax charges.

The worldwide minimal tax is only one half, generally known as the second pillar, of the OECD tax reform settlement.

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The primary pillar, which envisages taxing corporations the place they make their earnings in an effort to curb tax evasion, is primarily aimed toward digital giants and has but to be finalized.

The OECD additionally elevated its estimates of how a lot annual revenue may fall below Pillar 1 provisions to $200 billion from the earlier $125 billion.

This might generate $13 billion to $36 billion in further tax income, with low- and middle-income international locations seeing massive share positive aspects.

“The worldwide group has made important progress in implementing these reforms aimed toward making our worldwide tax regimes fairer and higher functioning in a digitalised, globalized world financial system,” stated OECD Secretary-Normal Mathias Cormann in a press release.

“This new financial influence evaluation reaffirms the significance of swift, environment friendly and complete implementation of those reforms to make sure these important potential income positive aspects will be realised,” he added.