Leaders from richer countries will attend the G7 Summit in Cornwall, UK, from June 11-13 at the first summit of world leaders “in person” since the pandemic began.
There are a number of complex global issues that G7 leaders will discuss at the summit, namely how to end the pandemic, start recovery and better prepare for climate change. The pressure is on the UK government, which will host not only the G7 but also the United Nations Conference on Climate Change later this year.
Everyone’s question is: who will pay the bill to address these global issues?
New ActionAid research shows that G20 countries can lose up to $ 32 billion a year in taxes from just five of the world’s largest technology companies. A fair one-year tax bill to tech giants Amazon, Apple, Facebook, Alphabet and Microsoft could have paid for the full-dose COVID-19 vaccination for all humans on earth.
Of course, this figure only provides an idea of the scale of resources involved in taxing large technology companies. In practice, it is by sharing knowledge and technology that vaccine production can be accelerated to reach as many people as possible.
One route is a temporary waiver of patents on vaccines and other COVID-19 therapeutic and diagnostic methods, as advocated by India and South Africa and more than 100 World Trade Organization countries. The Biden administration has done so recently supported the waiver of vaccine patentsand urge the UK government as G7 hosts to follow suit.
But ActionAid’s new report, Mission Recovery: How Big Tech’s Tax Bill Could Start a Fairer Economy, offers viable ways for governments to increase tax revenues and fund vaccines, utilities and a green recovery.
Technical giants like Amazon, Apple, Facebook, Alphabet and Microsoft have extensive market activity around the world and have amassed billions in profits during the pandemic. If global corporate tax systems were fair, governments could increase their tax revenues and fund better health systems to help end the pandemic and start the recovery.
With American treasurer Janet Yellen corporate tax comments recently, it is a hopeful time for advocates calling for a global minimum corporate tax that affects Silicon Valley tech giants, big polluters and many billionaires whose wealth has multiplied exponentially during the COVID-19 pandemic.
Another question that arises for some people is: How should we determine the corporation tax that large technology companies have to pay in each country where they operate? There are many ways to calculate this, but most recommendations suggest taking into account factors such as their sales, assets, and the number of employees they have in each country. In the absence of transparent reports from companies, it is not easy to collect this data, but we can get a useful estimate by looking at an intermediate indicator: the number of users they have in each country. For example, in just 20 developing countries, there are about 1.5 billion Internet users accessing Google, about 900 million people using Microsoft, and more than 750 million Facebook users. For these companies, the number of users is a good indicator of both their sales and their assets. For digital businesses, user data is perhaps the most valuable commodity, something that is extracted in various ways and can be sold from now on.
ActionAid is one of several organizations calling for a significant reform of international corporate taxation to ensure that corporate taxes reflect their real economic presence and introduce a minimum tax rate to help combat the problem of tax havens. First, we need to know what these companies pay (or don’t pay) in all the countries where they are present. Some companies, such as the big EU banks, are already subject to “country-by-country public reporting” involving the public disclosure by companies of key financial and tax data, broken down by countries where they operate. This requirement should be extended to all large multinational companies. In addition, we want the countries of the southern world to have a meaningful say in establishing global tax rules, which is why we support calls for the creation of a United Nations Tax Commission with powers. and the resources needed to establish and enforce fair tax rules.
The most everyday people have been the hardest hit by the pandemic: informal workers with precarious contracts, top-notch health heroes, and essential workers, most of whom are women. Working taxpayers around the world are right to be furious and wake up every day with headlines about the getting rich, as the world is hit by an unprecedented economic and health crisis. Wealth of 1 percent has increased by $ 3.9 trillion since the pandemic began, while the International Labor Organization found that global workers have lost $ 3.7 trillion in revenue in the pandemic. same period of time.
ActionAid’s new research shows that billions could be at stake in the long-awaited international tax reform of companies, enough to transform underfunded health and education systems around the world. And if there is no global agreement on taxes, countries could take unilateral steps to tax these companies on their profits or transactions.
The views expressed in this article are those of the author and do not necessarily reflect the editorial stance of Al Jazeera.
