Labour to force vote on global minimum rate of corporation tax

Labour will tomorrow [Monday] trigger a Commons vote to force the Government to back the global minimum rate of corporation tax being proposed by President Biden at the upcoming G7 summit.

Britain is now the only country to not back the plan, with Germany, France, Canada, Italy and Japan backing Biden’s proposal.

Labour has tabled an amendment to the Finance Bill to force the Government to back the proposal.

The Shadow Chancellor of the Exchequer Rachel Reeves MP, has marked the pact as a once in a generation opportunity to stop huge multinationals avoiding British tax and undercutting British businesses, as well as arresting the global race to the bottom on corporate taxation.

And Labour have pointed to how tech giants and large multinationals have avoided paying billions of pounds in tax every year that could be invested in British public services and industry.

Tax Justice UK estimate a 21% global minimum rate, initially proposed by President Biden, would bring in about £13.5 billion a year in extra tax benefitting Britain.

Rachel Reeves MP, Labour’s Shadow Chancellor of the Exchequer, said:

“The Conservatives have a choice: they can join Labour in tackling large-scale tax avoidance or they can allow billions of pounds to leave Britain.

“This global pact will bring in extra tax benefitting Britain, while stopping huge multinationals and online giants from undercutting our businesses.

“By making sure they pay their fair share in Britain, we can level the playing field for our brilliant businesses, and build an economic recovery with thriving industries, strong public services and good, secure jobs for all.”

Ends

Notes to Editors

• 21 per cent is the rate Biden has initially proposed. 25 per cent is the rate the Government propose domestically in the Finance Bill for financial year 2023. Section 6 of the Finance Bill commits the Government to raising corporation tax to 25 per cent in the UK in financial year 2023 (see page 2 of the Bill at: https://publications.parliament.uk/pa/bills/cbill/58-01/0295/200295.pdf)
• Germany: "I, personally, have nothing against the US proposal," Scholz told the German newspaper.
• France: "If that is the result of negotiations, we would also be agreed," Le Maire added.
• Italy: Mario Draghi, Italy’s prime minister, who also chairs the G20 this year, said he was “fully behind [the US] call for a global minimum corporate tax”.
• Japan: Speaking on the eve of a virtual gathering of financial leaders from the Group of Seven rich nations and the G20 major economies this week, [finance minister] Also welcomed U.S. Treasury Secretary Janet Yellen's calls for the introduction of a global minimum corporate tax rate.
• Canada: Canada’s finance minister has called the US proposal for a global minimum corporate levy a “breakthrough moment” in deadlocked international tax talks.