Labor Government Proposes Global Minimum Tax Bill

July 3, 2024 TruthUSA

The federal government is presenting the bill as an effort to address cost of living concerns.

The Australian Labor government has put forward a bill to establish a 15 percent global and domestic minimum tax for all multinational corporations.

Starting from Jan. 1, 2024, companies with a revenue of $1.2 billion (US$805.67 billion or 750 million euros) will be subject to this new standard.

Australia currently imposes a 30 percent company tax rate on businesses with a turnover of $50 million. However, both ministers and the Greens have criticized multinational companies for evading taxes.

Treasurer Jim Chalmers and Competition Minister Andrew Leigh stated on July 4 that, “These measures align us with many other nations, including major economies worldwide that are taking action against multinationals to ensure they pay a fairer share of taxes.”

“Preventing a global corporate tax rate race to the bottom benefits all Australians. When multinationals pay less, individuals and local businesses end up paying more,” the minister remarked.

“Our economic strategy focuses on combating inflation and alleviating the cost of living while also improving the budget significantly.”

This action is part of the Albanese government’s pledge to Pillar Two of the OECD and G20’s Two-Pillar Solution, a global standard agreed upon by 140 nations.

Since 2013, these two international organizations have collaborated on the Base Erosion and Profit Shifting (BEPS) initiative. For years, the United States resisted endorsing a global tax rate, but this stance shifted during the Biden administration.

However, some economists are not supportive of this proposal.

Robert Carling, the former executive director of the New South Wales Treasury, previously expressed concerns that a global tax system could disrupt the free market, especially since tax incentives are often crucial for developing countries to attract investments.

“I believe it’s an effort to hinder tax competition. Tax competition between countries is always beneficial and productive. This would impede it. There’s no other way to interpret it,” the senior fellow at the Centre for Independent Studies told The Epoch Times.

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