Global tax pact revival drive
US treasury secretary Janet L. Yellen arrived in Europe this week to join American allies in confronting multiple threats to the world economy: Russia’s war in Ukraine, soaring inflation and food shortages.
But one of Yellen’s first orders of business during a stop in Poland will be attempting to get the global tax deal that she brokered last year back on track after months of fledgling deliberations about how to implement it.
The two-pronged pact among more than 130 countries that was reached last October aimed to eliminate corporate tax havens by enacting a 15 per cent global minimum tax. Turning the agreement into a reality is proving to be a steep challenge.
The European Union has already delayed its timeline for putting the tax changes in place by a year and progress has been halted over objections by Poland, which last month vetoed a plan to enact the new tax rate by the end of next year.
Despite initially signing on to the deal, Poland has voiced reservations, including whether the minimum tax will actually prevent big tech companies from seeking out lower-tax jurisdictions.
Polish officials have also expressed concern that the two parts of the tax agreement are moving ahead at different paces, as well as trepidation about the impact that raising its tax rate will have on its economy at a time when the country is absorbing waves of Ukrainian refugees.
New York Times News Service