More consensus needed for G7 tax deal to achieve aims, says ICAEW

Finance ministers from G7 countries published an agreement which commits to a global minimum tax of at least 15% on a country by country basis

Greater consensus is needed for the G7 tax deal to achieve its ambitious aims, according to a leading accountancy organisation.

According to the Institute of Chartered Accountants in England and Wales (ICAEW), a worldwide consensus will be needed if world leaders are to deliver a “fair and sustainable” recovery.

Finance ministers from the G7 countries, including the US and UK, have published an agreement on working together to ensure a sustainable global recovery post-pandemic, which commits to a global minimum tax of at least 15% on a country by country basis.

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The G7 will potentially reach an agreement at the July 2021 meeting of G20 Finance Ministers and Central Bank Governors.

Michael Izza, chief executive of the ICAEW, said: “The Chancellor has called the G7 deal ‘historic’ and it’s hard to disagree with that. We welcome the progress that has been made on resolving the most pressing tax problem of our times.

“However, much remains to be settled – not least the wider adoption of this commitment, starting with the G20 in July and then the OECD.”

He added: “There will need to be a clear consensus worldwide that the headline minimum corporate tax rate of 15% will strike a fair balance between protecting the incentive to invest in and grow businesses and the need to rebuild public finances in the aftermath of the pandemic.

“If this can be achieved, it really could help create a fairer and more sustainable recovery for societies and economies around the world.”

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