WASHINGTON — An ambitious 2021 agreement by more than 140 countries and territories to weed out tax havens and force multinational corporations to pay a minimum tax has been weakened by loopholes and will raise only a fraction of the revenue that was envisioned, a tax watchdog backed by the European Union has warned.
Much of the hoped-for revenue has been drained away by loopholes, some of them introduced as the OECD has been refining details of the agreement, which has yet to take effect. The watchdog group estimates that a 15% minimum tax could have raised roughly $270 billion in 2023. With the loopholes, it says, that figure drops to about $136 billion.
The Tax Observatory also expressed concern that the race by governments to grant tax breaks for green technologies to fight climate change “raises some of the same issues as standard tax competition. It depletes government revenues." Last week, U.S. Treasury Secretary Janet Yellen said the minimum-tax agreement wouldn't be finalized until 2024.
Until the “automatic information exchange,’’ was introduced, it said, virtually all wealth that the world’s rich held offshore went untaxed. Now, only 25% escapes taxes. Matt Gaetz blasts the House GOP secret ballot process that knocked off Jim Jordan as the party's speaker nominee: 'It's as swampy as swamp gets'