Raising taxes on wealthy firms that have done well during the COVID-19 pandemic is increasingly viewed as a source of revenue to finance recovery efforts, an idea the IMF and the US pushed on Wednesday.
The renewed support for the reforms comes as G20 finance ministers said they would continue work on a minimum corporate tax that would undermine the use of tax havens, with the aim of announcing a deal in July.
As momentum builds for the plan, which has support of France and Germany, Washington is taking the first step — announcing details of a plan to raise corporate taxes and clamp down on loopholes to ensure companies making huge profits, at home or overseas, pay a minimum amount to the government.
Photo: AFP
“Destructive tax competition will only end when enough major economies stop undercutting one another and agree to a global minimum tax,” US Secretary of the Treasury Janet Yellen said.
Yellen this week said she is pushing the G20 to adopt a global minimum tax to prevent firms from evading taxes by establishing headquarters in countries with lower rates — a practice prevalent among tech companies.
The IMF supports that idea and also argues that higher taxes on wealthy firms and individuals, even if temporary, could finance policies needed to ensure recovery from the pandemic.
“The IMF has been calling for a minimum, global corporate income tax rate as a way to interrupt the race to the bottom in corporate income taxation,” said Vitor Gaspar, head of the IMF’s fiscal affairs department.
US President Joe Biden last week announced plans to raise corporate taxes to pay for a massive US$2 trillion infrastructure and jobs program.
The US proposal “is in the context of an effort at the global level to combat tax avoidance and evasion, and to make sure that large multilateral, multinational corporations pay their fair share in taxation,” Gaspar told reporters as he unveiled the IMF’s Fiscal Monitor report during the fund’s spring meetings.
Irish Minister of Finance Paschal Donohoe on Tuesday expressed “reservations” over the proposal.
Ireland is considered a major tax haven, but Donohoe rejected the notion the country has sought a “race to the bottom.”
The IMF also has promoted the option of using a “recovery contribution” or surcharge on personal or corporate incomes given that some major companies have done well during the pandemic.
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
Handset camera lens maker Largan Precision Co (大立光) on Sunday reported a 6.71 percent year-on-year decline in revenue for the third quarter, despite revenue last month hitting the highest level in 11 months. Third-quarter revenue was NT$17.68 billion (US$581.2 million), compared with NT$18.95 billion a year earlier, the company said in a statement. The figure was in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$17.9 billion, but missed the market consensus estimate of NT$18.97 billion. The third-quarter revenue was a 51.44 percent increase from NT$11.67 billion in the second quarter, as the quarter is usually the peak
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS