News Desk
ISLAMABAD/BRUSSELS: The European Union (EU) has adopted a plan for a global minimum 15% tax on several multinational businesses after leaders assented to the proposal following months of discussion.
The historical deal with 140 countries aims to prevent governments from reducing taxes to lure the world’s richest companies to their countries.
Paolo Gentiloni, EU Economy Commissioner, said on Friday that the EU has taken an important step towards tax transparency and social justice. Minimum taxation is crucial to deal with challenges a globalized economy presents.
The plan was framed under with the instructions of the Organisation for Economic Cooperation and Development, which has the support of the US and several major economies in the EU.
However, implementing the minimum tax in the twenty-seven-member EU has already been delayed as some members raised objections or used blocking tactics.
Poland blocked formal approval of the proposal last week while objecting over unrelated measures, such as the Western sanctions on Russia.
European Union to implement plan next year
The latest summit negotiated away such objections, and the tax plan will come into effect across the EU at the end of 2023.
German Chancellor Olaf Scholz appreciated the plan, saying it is a very good project.
French Emmanuel Macron also agreed with Scholz and said that France had been trying for the plan for over four years.
At present, the global minimum tax, known as Pillar Two of the OECD agreement, is only 1 percent.
