The G7 group of wealthy nations back deal with tax multinationals to increase taxation.
Finance ministers who met in London decided to combat tax evasion. Furthermore, they make businesses pay more in the nations where they do business.
They also agreed in principle on a 15% worldwide minimum corporation tax rate to prevent countries from undercutting one another.
Amazon and Facebook, both tech-heavyweights, will expect to be impacted.
On Saturday, the US, EU, UK, France, Germany, Canada, Italy, and Japan announced a pact. This agreement may see billions of euros go to governments to pay off debts accrued during the Covid crisis.
Negotiated over many years, it will put pressure on other countries to follow suit. It includes G20 Countries, China, Russia, and Brazil.
US Treasury Secretary Janet Yellen told reporters that the “historic” agreement on a global minimum tax would “end the race to the bottom in corporate taxation. Also, it ensure fairness for the middle class and working people in the US around the world”.
Rishi Sunak, the UK Chancellor of the Exchequer, who hosted the event, remarked the agreement would make the global tax system “fit for the global digital age”.
His German counterpart, Olaf Scholz, said “Wealthy nations back deal with tax multinationals. It was very good news for tax justice and solidarity and bad news for tax havens”.
“Companies will no longer be in a position to dodge their tax obligations by booking their profits in lowest-tax countries,” he said.
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