Rishi Sunak has been urged to throw his full weight behind US proposals for a global minimum corporate tax rate after analysis showed it would bring in an extra £13.5bn a year for the public purse.

The campaign group Tax Justice UK said the Biden administration plan would help raise billions of pounds a year for the UK exchequer by hitting multinationals and US tech giants operating in the country with higher tax bills, including firms such as Amazon, Apple, Google owner Alphabet and Facebook.

Under the US blueprint, the world’s 100 most profitable multinationals would be forced to pay taxes to national governments based on the sales they generate in each country, irrespective of where they are based. It would also establish a global minimum tax rate to help bring an end to profit-shifting by multinationals and discourage countries from undercutting each other on tax rates. Washington has suggested a rate of 21%.

Finance ministers from across Europe – including from Germany, France and the Netherlands – have welcomed the US intervention as a signal that significant global progress can be made on tackling tax avoidance by big companies and digital firms.

However, tax campaigners said the UK government had been silent on the US plans, and urged the chancellor to give his full backing to Washington. The Labour shadow chancellor, Anneliese Dodds, also said Britain needed to play a leading role.

“Now that President Biden has moved the debate on, it’s important that our government moves to play its part,” she said.

Paul Monaghan, chief executive of the Fair Tax Mark campaign group, said other big European countries and the International Monetary Fund had responded publicly to the plan. “But we’ve heard nothing from Boris Johnson or Rishi Sunak in the UK as yet,” he said.

“The world has a once in a generation opportunity to embed tax justice and eradicate profit-shifting. It’s vital the UK steps up to the plate and publicly backs what the US and other progressives are trying to do.”

It is understood the UK Treasury recognises the need for an agreement on a global minimum tax rate as part of negotiations

Share.

Comments are closed.