The UK wants more G7 growth in climate funding, aimed at tax reform

British President (Finance Minister) Rishi Sunak attends a virtual press conference on March 3, 2021, at 10 Downing Street, central London. REUTERS / File Photo by Tolka Akmen / Pool

After a meeting with other finance ministers and central bankers in the UK on Friday, UK Finance Minister Rishi Sunak called for further progress to ensure that financial markets support reducing greenhouse gas emissions. G7 is a group of rich countries.

Sunak seeks consistent international rules on how companies report their climate impact so investors can find out more, the UK Finance Ministry said.

Sunak hopes Britain will hold a face-to-face meeting of finance ministers in London on June 4-5 to negotiate an agreement between the G7 countries on a common approach to trade taxation.

The United States has suggested an overall corporate tax rate of 15%, which is lower than the G7 level, but higher than some countries such as Ireland. But Britain is concerned that these plans are not enough to tax tech companies such as Amazon, Google and Facebook.

“I look forward to meeting next week as we continue to work together to support jobs and achieve a greener and global economic recovery,” Sunak said after leading the virtual talks on Friday, which also addressed the global economy and the central bank’s digital currencies.

U.S. Treasury Secretary Janet Yellen told the meeting that it was important to provide additional budget support to “promote a strong and sustainable recovery from the epidemic.”

The White House on Friday unveiled a $ 6 trillion budget aimed at boosting spending on infrastructure, education and the fight against climate change. read more

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Irish Finance Minister Basel Donohuez, who attended the meeting as chairman of the Eurozone Finance Ministers’ Council, said the epidemic of Govt-19 had raised the need for international cooperation.

“As we emerge from this crisis and open up our economies, (…) we will increasingly need policies that will help us build, grow and transform,” he said.

Tax challenge

Some sources close to Friday’s talks said a tax deal could be reached early next week.

But others are more pessimistic and expect more vague policies than a deal at a certain minimum rate.

Britain will have another chance to reach an agreement when Prime Minister Boris Johnson convenes a meeting of G7 heads of government on June 11-13.

A French finance ministry official said after the meeting on Friday that the G7’s clear statement would increase the chances of international consensus at the G20 summit in July, which includes key emerging economies.

The Paris-based Economic Cooperation and Development Organization has spent years trying to carry out global tax reform, mainly through the G20.

In the absence of progress, the UK imposed a digital service tax in 2020 on $ 500 million ($ 710 million) in global revenue and more than $ 25 million in sales in the UK. In 2019, France took similar steps.

The United States has threatened to tax these activities and wants them removed as part of a global tax treaty. Britain does not want a deal that will increase overall revenue, but reduce taxes paid by foreign companies in the UK.

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