Yellen says global minimum tax needed, too soon to declare victory over pandemic

By David Lawder (Reuters) - U.S. Treasury Secretary Janet Yellen said on Monday that she is working with G20 countries to agree on a global corporate minimum tax rate to end a '30-year race to the bottom on corporate tax rates.' The global minimum tax is a key pillar of President Joe Biden's $2 trillion infrastructure spending plan, which calls for an increase in the U.S.

Reuters April 06, 2021 00:06:38 IST
Yellen says global minimum tax needed, too soon to declare victory over pandemic

Yellen says global minimum tax needed too soon to declare victory over pandemic

By David Lawder

(Reuters) - U.S. Treasury Secretary Janet Yellen said on Monday that she is working with G20 countries to agree on a global corporate minimum tax rate to end a "30-year race to the bottom on corporate tax rates."

The global minimum tax is a key pillar of President Joe Biden's $2 trillion infrastructure spending plan, which calls for an increase in the U.S. corporate tax rate to 28%..

Without a global minimum, the United States would again be at a disadvantage to a number of other major economies with lower tax rates, tax experts say, with U.S. commitment helping to jump start negotiations for a tax deal among a number of major economies.

Yellen, speaking to the Chicago Council on Global Affairs, said she also would use her participation in International Monetary Fund and World Bank annual meetings this week to advance discussions on climate change, improve vaccine access and encourage countries to support a strong global recovery.

The new Treasury chief said it was important to "end the pressures of tax competition" and make sure governments "have stable tax systems that raise sufficient revenues in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."

Separately, a U.S. Treasury official told reporters that it was important to have the world's major economies on board with a global minimum tax to make it effective.

The official said the United States would use its own tax legislation to prevent companies from shifting profits or residency to tax haven countries and would encourage other major economies to do the same.

The Biden plan proposes a 21% minimum corporate tax rate, coupled with eliminating exemptions on income from countries that do not enact a minimum tax. The administration says the plan will discourage the shifting of jobs and profits overseas.

Yellen said in her remarks that while advanced economies had successfully supported their economies through the COVID-19 pandemic, it was too early to declare victory, and more support for low income countries to gain access to vaccines was needed.

"I am urging our partners to continue a strong fiscal effort and avoid withdrawing support too early, to promote a strong recovery and help avoid the emergence of global imbalances.

(Reporting by David Lawder in Washington and Bhargav Acharya in Bengaluru; Editing by Emelia Sithole-Matarise, Andrea Ricci and Chizu Nomiyama)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.