Monday 15 November 2021

Blunting the edge of fiscal paradises

Two weeks ago leaders of world's 20 richest countries gathered for summit in Rome with the aim of adopting corporate tax rules. The agreement is aimed at "blunting the edge of fiscal paradises". As it is known, multinational companies make money in one country and move their profits to another.

In this contexts, about 14 countries representing more than 90% of global economic output endorsed the agreement which aims to raise more revenue for most governments and offer stability to international businesses. Consequently, profits of big companies will face tax at least 15% under pact approved at the 2021 Rome's G20 summit.  In addition to this, companies have to be taxed in territories where they sell their products and services, rather than where they are headquartered. But four countries (Pakistan, Nigeria, Sri Lanka, and Kenia) rejected the deal, as they said it will not be sustainable. 

I hope the agreement will be useful to end decades of competition between countries to attract foreign investments.


The 1st picture above shows the neighborhood of Rome where the G20 summit was held in late October. The tall white building in the picture, which was designed in 1938, is an example of the Italian Rationalism (someone would like to call it as fascist architecture). The style resembles that of the ancient Rome. This neighborhood is a business district, nowadays. And the building is known in everyday speech as "Swiss cheese" or "Square Colosseum".

10 comments:

  1. ...corporation are fabulous at playing the game of moving money and avoiding taxes!

    ReplyDelete
    Replies
    1. True! It's one of the biggest problems in the world today, as thanks to their game rich people get richer, and poor people get poorer.

      Delete
  2. Interesting vote. There will always be a loophole for the rich NOT to pay their fair share and yes, the rich will get richer and the poor will get poorer and what is left of the middle class will foot the bill.

    ReplyDelete
    Replies
    1. mmm ... I am afraid the goal is to destroy the middle class over a long period of time 🤨

      Glad to see you were interest in my post, Nicole!
      Have a nice time

      Delete
  3. Yep, the rich get richer and the poor get poorer.

    It's the sad truth.

    ReplyDelete
    Replies
    1. True! The 0,1 % richest people in the world have been becoming richer since the epidemic began in early 2020. I am afraid they will continue to become richer, considering that the whole world population will be compelled to get COVID-19 vaccine doses every six months, year after years.

      Thanks for sharing your point of view, Veronica :-)

      Enjoy the rest of this week!

      Delete
  4. Replies
    1. Thanks for reading my post about fiscal paradises, Ashok!

      Unfortunately, the main problem is that big tech companies, such as Amazon and Google, shift their profits to low-taxes havens. Consequently, countries where revenues are earned haven't been compelled to tax big tech multinationals. That's why big tech companies can be very competitive. And they are also so able to destroy retailers around the world. In other words, they're destroying the middle class slowly and gradually.

      Delete
    2. very true Giorgio. But unfortunately I don't see this changing in today's world

      Delete
    3. Exactly. This is the main problem, as many governments still disagree on a global tax (on multinational companies' earnings), such as Amazon, google, etc

      Delete