Germany hails US corporate tax decision as ‘big step forward’

German Finance Minister Olaf Scholz on Tuesday praised Washington’s support for a global minimum corporate tax, calling it “a big step forward” in the battle to stem the erosion of government revenues.

“The support of the United States gives this initiative a strong positive wind,” Scholz told reporters, saying he hoped a deal could be reached this year.

The optimism comes a day after US Treasury Secretary Janet Yellen said Washington was pushing the G20 towards a minimum global corporate tax, saying the interconnected global economy had led to “a 30-year race towards low corporate tax rates “.

“Together, we can use a global minimum tax to ensure that the global economy thrives on a more level playing field in the taxation of multinational corporations,” she said in a speech to the Chicago Council on Global Affairs.

German Finance Minister Olaf Scholz has said that a global minimum corporate tax can “end the race to the bottom” on taxation.

Finance ministers from the G20 club of major economies are expected to discuss the proposal in a virtual meeting on Wednesday, hosted by Italy.

A Treasury official told reporters the G20’s goal is to have a global minimum tax proposal by July, and President Joe Biden’s administration could change its legislation to align the tax if necessary. US minimum internationally.

A G20 deal would give impetus to ongoing negotiations within the wider Organization for Economic Co-operation and Development (OECD) on a global minimum tax as a way to protect all members from eroding tax revenues.

“I am convinced that with this corporate tax effort we can end the race to the bottom,” said Scholz, calling Yellen’s support a “big step forward.”

“It is now realistic to reach an agreement this year,” he added.

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