G7 nations sign landmark global agreement to make tech giants pay fair taxes

The world’s richest countries signed a landmark global agreement Saturday to confront tax avoidance and make sure that giant tech companies pay their fair share, Britain’s treasury chief said.

Treasury chief Rishi Sunak said finance ministers from the Group of Seven leading industrialized nations signed the pact on the second and final day of meetings in London.

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“I’m delighted to announce that G7 finance ministers today, after years of discussions, have reached a historic agreement to reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places,” Sunak said in a video message posted on Twitter.

The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for June 11-13 in Carbis Bay, Cornwall. The UK is hosting both sets of meetings because it holds the group’s rotating presidency.
The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of COVID-19 infections and to finance projects to combat climate change.

US Treasury Secretary Janet Yellen at the G7 nations meeting at Lancaster House in London, June 5, 2021, ahead of the G7 leaders’ summit. (AP/Alberto Pezzali, Pool)

US reaction

Meanwhile, US Treasury Secretary Janet Yellen said on Saturday that G7 finance ministers made a “significant, unprecedented commitment” toward achieving a global minimum tax rate of at least 15 percent to end a “race to the bottom” on corporate taxation.

“The global minimum tax would also help the global economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases,” such as education, research and infrastructure, Yellen said in a statement.

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