US Treasury Secy hopes Congress will approve global corporate tax deal

Washington, Oct 11 US Treasury Secretary Janet Yellen has said that she hoped the Congress would approve a key pillar of the global corporate tax deal agreed by some 136 countries and jurisdictions.

“I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package,” Xinhua news agency quoted Yellen as saying on ABC News on Sunday, referring to a spending package being negotiated by the White House and Democratic lawmakers.

“I hope that it will be passed and we will be able to reassure the world that the US will do its part,” she said.

Yellen’s remarks came after the Organisation for Economic Cooperation and Development (OECD) announced on Friday that a major reform of the international tax system has finalized, which includes a global minimum corporate tax rate of 15 per cent.

“This is really an historic agreement. It’s something that is very important for American workers to stop what’s been a decades-long race to the bottom on corporate taxation, where countries try to cut their taxes to attract our businesses,” Yellen said.

“And this agreement to place a halt on how low tax rates can go so that all of us have the opportunity to collect tax revenue from successful corporations, and not just from workers. This is really something we need to make globalization work,” she added.

The global corporate tax deal will also reallocate more than $125 billion of profits from around 100 of the world’s largest and most profitable multinational companies to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits.

The deal will be delivered to the G20 Finance Ministers meeting in Washington D.C. on October 13, then to the G20 Leaders’ Summit in Rome, Italy at the end of the month, according to the OECD.

However, Senate Finance Committee Republican Leader Mike Crapo and House Ways and Means Committee Republican Leader Kevin Brady have blasted the deal, which has the support of the Joe Biden administration.

“Rather than securing an agreement that would provide certainty and immediately eliminate digital services taxes, the Administration has instead used this global forum to advance its short-sighted domestic tax agenda,” Crapo and Brady said in a statement.

“By doing so, the Biden administration is putting politics over progress and surrendering the fate of the US economy to our foreign competitors,” they said.

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