The International Monetary Fund (IMF) predicted on the 12th (local time) that if the minimum global corporate tax rate, approved by G20 leaders last year, is fully implemented, the corporate tax paid by global companies will increase by about 14% annually.
According to Bloomberg News, the IMF estimated that the application of the minimum tax rate will increase corporate tax payments by 5.7 percent and about $150 billion internationally.
In addition, as competition for tax cuts between countries decreases, corporate taxes collected by governments will increase by an additional 8.1%, and the overall corporate tax growth rate will reach 13.8%.
The IMF’s estimate is also consistent with the analysis released by the Organization for Economic Cooperation and Development (OECD).
Earlier, the OECD said that companies lose between $100 billion and $240 billion in tax revenue every year due to tax avoidance, and that tax revenue is expected to increase by $150 billion if the minimum tax rate is applied.
Bloomberg, however, pointed out that the IMF’s latest estimate was based on the assumption that all countries would meet the minimum tax rate, so the actual increase in tax revenues in each country may fall short of this.
He also said that although the OECD has actively introduced the minimum tax rate, it has no authority to enforce it in each country, and that differences have not been resolved within the U.S. and the European Union (EU), which approved the introduction of the minimum tax rate.
At the Rome summit in October last year, the G20 leaders approved a global tax reform plan that included the imposition of the global minimum tax rate and the introduction of digital taxes agreed by the OECD/G20 Comprehensive Implementation System (IF).
The OECD/G20 IF agreement, which involved 136 countries around the world, consists of the so-called digital tax introduction, the distribution of taxation rights in sales-producing countries (Phila 1) and the introduction of the global minimum tax rate (Phila 2).
The minimum tax rate stipulates that multinational companies with consolidated sales of more than 750 million euros must pay more than 15% of taxes wherever they do business in the world from 2023.
