As the G7 Finance Ministers’ Meeting in London concluded with exalted acclaim from its member states on the “groundbreaking overhaul” of global tax rules, movements raised alarm bells against the impact of the G7 commitment to a 15% minimum global corporate tax rate. Finance Ministers of the Group of 7 (G7) – composed of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – meet annually ahead of the G7 Summit attended by heads of state.
“The G7 commitment setting a global minimum corporate tax rate of 15% is a highly regressive and undemocratic blow to the clamor for tax justice by peoples in the Global South,” says Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD). “90% of the world’s population stand to suffer the consequences of a decision by the richest 10%.”
APMDD’s statement follow the report released by the United Nations High Level Panel on International Financial Accountability, Transparency and Integrity (UN FACTI) in February 2021, recommending a global minimum tax rate of at least 25-30% of corporate profits to ensure a high enough amount for equitable redistribution of recovered revenues that can be used to fund essential public services and long-term sustainable development.
“Global South countries lose $427 billion in tax revenues and 52% of their combined public health budget yearly from corporate tax abuses, striking at a critical time for fiscal systems that are at near collapse due to debt for pandemic relief and the lethal costs of the vaccine apartheid engineered by countries in the Global North,” Nacpil adds, citing the findings of The State of Tax Justice 2020, a study documenting the tremendous disparity in the impacts of corporate tax abuses on public health systems between countries in the G7 and the developing world.
The UN FACTI Report also recommended the establishment of a tax body on the level of the United Nations where all countries are represented on an equal basis. Nacpil calls attention to the G7’s attempt to frame the agenda on global tax reform ahead of the UN Convention:“the G7’s systematic attempt to steer the direction of global tax rules to further their interests and benefits represents a blatant disregard for the disproportionate burden of foregone revenues borne by peoples in the Global South”
When asked on their proposed alternative to the G7 deal and the incoming G20 Summit, Nacpil reiterates APMDD’s longstanding demands. “We reject the rules set by an exclusionary rich man’s club’ for the rest of the world. We call on world leaders, leaders of developing countries, and civil society to fight for a just agreement through a UN Tax Convention and for an inclusive, democratic and transparent UN Tax Body.”