Google, Amazon, And Facebook Cs Will Be Subjected To 15 Percent Tax By G7 Countries

Facebook et al will be taxed 15 percent (Economic Times)

JAKARTA – The G7 countries which include the United States (US), Britain, Germany, France, Japan, Canada and Italy, have agreed to impose a 15 percent tax on multinational companies such as Google and Amazon. The tax withdrawal is planned to be used to help restore the economies of countries affected by the pandemic.

Commenting on the policy, the US technology giant Facebook expressed its approval. Facebook also plans to pay more taxes after the Biden administration put pressure on them.

"We wanted the international tax reform process to be successful and realized this could mean Facebook paying more taxes and in a different place," said Nick Clegg, vice president of global affairs at Facebook.

Based on a Reuters report, representatives of finance ministers from G7 countries agreed on tax regulations to bring about changes to the global tax system.

This is because the current global tax policy is still based on regulations drawn up in the 1920s. Therefore, they agreed to make changes due to the rapid development of digital today.

"The G7 finance ministers have reached a historic agreement to reform the global tax system to suit the current digital era," said Rishi Sunak, UK Finance Minister.

In addition, the US Treasury Secretary, Janet Yellen revealed that a policy like this has never happened. He hopes that these changes can bring justice in the world of global taxation in the future.

"Significant and unprecedented commitment, what I saw during the G7 was deep collaboration and addressing broader global issues," said Janet.

A different opinion came from the German finance minister, Olaf Scholz. He said the policy would be a nightmare for countries that are "tax havens".

“This policy is bad news for tax havens around the world,” said Scholz.

During the meeting, they also agreed to improve company standards to reduce climate change. This is expected so that investors can decide to invest in environmentally friendly companies.

Ireland's finance minister, Paschal Donohoe, voiced that the decision should take into account its impact on small countries. Because environmental activists will protest the 15 percent tax.

Some activists consider the tax to be too small compared to the environmental damage caused by multinational companies. Activists think that the tax still needs to be raised.

“They set the bar so low that the company can undermine it,” said Max Lawson, Oxfam's Head of Social Inequality Policy.