Global Minimum Rate of Tax: America has got the support of more than 130 countries regarding the global minimum rate. Under this process, the revenue of the governments will increase.
US Treasury Secretary Janet Yellen
Global Minimum Rate of Tax: The US has secured international support for the Global Minimum Tax Agreement. With this system, there will be a major change in the rules for taxing international companies. Which will be a win-win deal for the world. The finalization of this agreement is a big step under the domestic plans of the Joe Biden administration of America. Under this, the objective of increasing the revenue has been kept. Officials of 130 countries have agreed on Thursday on its comprehensive framework.
The countries from which America has received support include all the groups of G20 countries. This will be the biggest change of the century in international taxation (Global Minimum Tax Meaning). Earlier, big developing countries like India and China had objected to it. Now these governments will try to pass laws to ensure that companies that have their headquarters in their countries pay at least a minimum rate of 15 percent of tax. This will also curb the company’s efforts to avoid paying taxes.
Governments suffer losses every year
According to a Voss Street General report, the Organization for Economic Co-operation and Development, which guides this conversation, estimates that companies are taxed by the government at around $100 billion and 240 billion dollars each year. The loss of revenue is between billions of dollars. But a lot will change after this new policy. This time China and India are also included in the support of America. More than 130 countries will now prepare its outline.
Yellen spoke to Sitharaman
Two days ago, US Finance Minister Janet Yellen also discussed the global minimum tax with Indian Finance Minister Nirmala Sitharaman. There was a phone conversation between the two (Global Minimum Tax Meaning). After which the US Treasury Department issued a statement saying, ‘Yelen has stated that it is the shared interest of both the US and India in implementing a strong global minimum tax.’ Both leaders have stressed on restructuring the international tax system to make the global economy prosperous.
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