Politics

G20 digital tax takes step closer

PARIS, Global efforts to impose a unified tax

policy on Google, Facebook and other internet giants have cleared a major

hurdle ahead of a G20 summit in Japan, officials said Friday.

The Parisbased Organisation for Economic Cooperation and Development said

that 129 countries had signed off on a roadmap to grab a fairer tax share of

the companies' booming sales.

Important progress has been made through the adoption of this new

programme of work, but there is still a tremendous amount of work to do as we

seek to reach, by the end of 2020, a unified longterm solution to the tax

challenges posed by digitalisation of the economy, OECD secretarygeneral

Angel Gurria said in a statement.

The OECD said Gurria would seek the blessing of G20 finance ministers for

the roadmap when they meet in the Japanese city of Fukuoka on June 89.

That meeting is in preparation for a full G20 summit involving US

President Donald Trump, Chinese President Xi Jinping and their peers in Osaka

at the end of June.

The summit will be an important staging post on the way to the OECD's goal

of agreeing the new tax policy by the end of next year.

The research body has been tasked by the G20 to find a technical fix to

the problem of internet heavyweights taking advantage of lowtax

jurisdictions such as Ireland to pay a pittance on their profits and revenues

in other countries.

Japan's Nikkei business daily said the G20 countries were planning a new

tax policy based on the amount of business a company does in a country, not

where it is headquartered.

The OECD's roadmap is based on two main pathways: one to determine where

taxes should be paid, the other to ensure a minimum level of tax is levied.

The existing setup has cost governments up to $240 billion in lost tax

revenues, the OECD estimated in 2015. The figure today would be much higher.

But rival proposals are in the mix to address the problem. The United

States is notably pushing for a much wider approach which could ensnare

European and Asian multinationals involved in other sectors beyond

technology.

So the OECD and G20 must find a consensus around a single proposal to

achieve their timeline. In the absence of that, several European nations

including Britain and France have started going their own way, drawing US

ire.

Today's broad agreement on the technical roadmap must be followed by

strong political support toward a solution that maintains, reinforces and

improves the international tax system, Gurria said.

The health of all our economies depends on it.

Source: Bangladesh Sangbad Sangstha (BSS)