Japan's Finance Minister Taro Aso said the Group of Seven has struck a "historic" agreement on a minimum global corporate tax of at least 15%, adding momentum for a broader deal among the major G20 economies.
Aso said the G7 tax deal was reached because countries realized they could no longer count on a race to the bottom on corporate tax cuts to spur growth. The main factor, he added, was that the United States faced a decline in tax revenue and massive spending on the Corona virus, both of which called for the need to restore financial health, paving the way for the G7 deal.
The Group of Seven includes the United States, Japan, Germany, Britain, France, Italy, and Canada. Aso went on to say he could not figure out how the tax deal would affect corporate behavior.
"Some small countries must have benefited (from lower tax rates to attract companies) so we should take time to work out the details, as we aim to build consensus through an overarching framework," Aso stated.
"Some of the small countries must have benefitted (from lower tax rates in attracting businesses) so we must take time in working out the details, as we aim to build a consensus through an inclusive framework."