Global tax deal finally finds agreement as Ireland, Estonia & Hungary drop objections

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Global tax deal finally finds agreement as Ireland, Estonia & Hungary drop objections

On Friday, a group of 136 OECD (Organization of Economic Co-operation and Development) member countries had agreed to a minimum global tax rate of 15.0 per cent for blue-whale multinational business groups, largely aimed at making it harder for heavy-weight conglomerates to avert taxation by registering HQs in low-tax safe-haven nations, while US President Joe Biden had welcomed the deal as well despite the scale of damage a barrage of US-based multinational businesses would have to bear as a repercussion to a sweeping reform in global tax rules.

Biden was quoted saying shortly after reaching an accord over a global tax rate of 15.0 per cent with Dublin, Budapest alongside Tallinn dropping their oppositions off the table, that, the deal had metamorphosized a level-playing ground.

Nevertheless, it still remains to subject to deep discontent on whether such a swift reform on global tax rules could be reached without existence of a pandemic that had toiled trillions from advanced economies in stimulus alongside other measures over past one year and a half, suggested analysts.

In point of fact, latest accord on global tax rule had been an expensive harvest of years of negotiations that had witnessed a number of trade rows among nations over taxation on multinational business entities, while a latest reform in global taxation would likely to wind up a four-decade-long dash for a deluge of entities seeking a tax-haven state, as the latest overhaul targets to set up a base-level for countries who had been on the lookout of being a tax-haven nation in bids to draw in havoc-scale investments alongside jobs.

Global tax reforms finally witness a dawn

Apart from that, followed by the agreement, Joe Biden said in a separate statement, “Establishing, for the first time in history, a strong global minimum tax will finally even the playing field for American workers and taxpayers, along with the rest of the world.

Nonetheless, out of 140 member countries involved in the deal, 136 had voted in favour of a global-scale tax of 15.0 per cent, which is still much lower than a tax of 23.5 per cent in industrialized countries, though, Kenya, Nigeria, Sri Lanka and Pakistan abstained from voting.