ROME: G20 leaders have formally endorsed the global agreement for a minimum 15 percent corporate tax, US Treasury Secretary Janet Yellen said on Saturday, hailing it as a “historic” step.

“Today, every G20 head of state endorsed a historic agreement on new international tax rules, including a global minimum tax that will end the damaging race to the bottom on corporate taxation,” she said on the sidelines of the G20 summit in Rome.

Some 136 countries representing more than 90 percent of global GDP have signed a OECD-brokered deal to more fairly tax multinational companies and enact a minimum tax on global corporations of 15 percent.

The mini-revolution, first mooted in 2017 and given a boost through the support of US President Joe Biden, is due to come into effect in 2023 — but the deadline could slip, partly due to resistance among US lawmakers.

The first pillar of the reform, which involves taxing companies where they made their profits, not just where they are headquartered, has run into fierce opposition in the US Congress.

US internet giants such as Google, Amazon, Facebook and Apple — experts in basing themselves in low-tax countries to minimise their tax bills — are particular targets of the new global regulation.

Climate, economy & vaccines

No consensus had yet emerged on a collective commitment on climate change, on the eve of the crucial COP26 conference starting in Glasgow on Sunday.United Nations Secretary General Antonio Guterres warned leaders on Friday to show “more ambition and more action” and overcome mistrust in order to advance climate goals.

Hosts Italy want the G20 to collectively endorse the UN goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, one of the aspirations of the landmark 2015 Paris climate accords.

But G20 members, many at different stages of economic development, remain at odds over the other major goal of reducing greenhouse gas emissions to net zero by 2050.

“We have a moment now when we can try and take some of the nebulous commitments in Paris, solidify them into hard, fast, commitments to cut emissions, to cut cars and coal and so on,” said British Prime Minister Boris Johnson, who will host the Glasgow talks.

As the leaders huddled, hundreds of climate protesters gathered in the city centre to demand tougher action.

“We’re asking G20 leaders to stop playing games among themselves and finally listen to the people and act for the climate, as science has been asking for years,” Fridays for Future activist Simone Ficicchia said.

Another key topic of discussions is the ongoing coronavirus pandemic, with both Xi and Putin raising the issue of the uneven distribution of vaccines in their comments to the group via video link.

Putin blamed disparities on “dishonest competition, protectionism and because some states, especially those of the G20, are not ready for mutual recognition of vaccines and vaccination certificates”, in his speech broadcast on Russian state television.

Get them vaccinated

No new pledges are expected to address the vast gap in Covid-19 vaccine access between rich and poor countries. But summit host Mario Draghi, the Italian prime minister, said the G20 should “do all we can” to meet a WHO goal of vaccinating 70 percent of the global population by mid-2022.

According to a source who followed the summit discussions, “all the leaders” agreed to commit to that target.

Published in Dawn, October 31st, 2021