politics

Starmer's criticism for UK block on corporation tax increases


Keir Starmer has slammed the UK Government for being the only G7 nation to block a 21% tax hike on corporations like Amazon, Google and Facebook.

His words come after Chancellor Rishi Sunak said he will go into the first summit of the economic powerhouses since the pandemic started arguing for a “fair deal” for digital companies.

Less than two weeks ago MPs voted down a Labour amendment to the Government’s Finance Bill, by 364 to 261.

It would have forced Mr Sunak to publish a review within six months on how a global minimum rate of 21% or 25% would affect the taxpayer – and assess its impact on “tax avoidance and evasion”.

Leaders from the US, UK, France, Germany, Japan, Canada and Italy meet at Lancaster House in London today, ahead of the full summit in Cornwall next weekend.



Prime Minister Boris Johnson
Prime Minister Boris Johnson is being asked to justify why the UK won’t back a minimum 21% tax on digital corporations

The group will discuss measures to tackle climate change as well as efforts to secure an international agreement on how digital companies are taxed.

The idea is the brainchild of United States President Joe Biden and, according to the Institute for Public Policy Research’s Centre for Economic Justice, it could pump £14.7bn into the UK’s tax coffers if adopted here.

The White House-backed proposal would make it less attractive for multinational companies such as Facebook, Amazon and Google to legally switch profits around different countries, including tax havens.

Mr Starmer said any extra cash gleaned from a minimum rate of 21% could fund vital public services. Ironically it’s around the same amount asked for by the Government’s own education expert Sir Kevan Collins in his report on how to help schools recover post-pandemic. He resigned after only £1.4bn was committed to helping kids catch up on learning.



Keir Starmer
Keir Starmer says more cash from tax hikes on global digital players would help fund vital services

Mr Starmer tweeted: “G7 finance ministers are meeting today to agree President Biden’s global minimum corporate tax rate of 21%. It could raise £14.7 billion for Britain every year which we would spend on our public services. Boris Johnson, why are we the only country not backing it?”

Ahead of the summit Shadow Chancellor Rachel Reeves accused the Government of “gifting the biggest multinationals £131 million a week” in lost tax revenue.

Rishi Sunak said: “The G7 is a hugely important grouping and it’s an honour to be welcoming my counterparts to London with a renewed spirit of multilateral cooperation.

“Even before holding the G7 Presidency we’ve been clear on our priorities – protecting jobs, ensuring a green and global recovery and supporting the world’s most vulnerable countries.

“Securing a global agreement on digital taxation has also been a key priority this year – we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners.

“I’m determined we work together and unite to tackle the world’s most pressing economic challenges – and I’m hugely optimistic we will deliver some concrete outcomes this weekend.

“Together we can make a real change and help steer the international community through the next stage of our recovery.”

Sunak has previously announced plans to increase corporation tax from 19% to 25% for large companies by 2023 and is believed to be backing a global rate of just 15% for digital companies.

Should loopholes be closed so multinationals have to pay their fair share of tax? Have you say in the comments section below.





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