Global minimum tax proposal misses the mark

Corporate taxation is one of the thorniest issues in international economic policy. Janet Yellen, US President Joe Biden’s treasury secretary, and a former head of the Fed weighed in when she grabbed the attention of the occupants of corner offices worldwide with a speech to the Chicago Council on Global Affairs earlier this month. The headline was a call for countries to agree on a global minimum tax rate for large companies. Over the past decade growing corporate tax avoidance (driven by well-known international economic factors) has met with a growing public backlash. It has an understandable moral clarity, apart from the loss of revenue. Hence the renewed debate on a global minimum corporate tax rate. However, accepting that there is a real problem here about the erosion of domestic tax bases, the question is how the various competing national interests can negotiate a sensible compromise here by June this year given the complexities? Michael Avery spoke to SARS Commissioner Edward Kieswetter; Judge Dennis Davis, head of the Davis Tax Committee; And Keith Engel, the Chief Executive of SA Institute of Tax Professionals.