Global minimum tax: Consumers also benefit from agreements


Global minimum tax
Consumers also benefit from agreements

Federal Finance Minister Scholz has already described the agreement on a global minimum tax as “historic”. Top economist Fratzscher sums up its extent: Germany is one of the “biggest winners” of the regulation – and will soon be able to look forward to many additional billions.

The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, sees great advantages for Germany in the agreement of the G7 countries on a global minimum tax. “Germany is one of the biggest winners of global minimum taxation: It will flush many billions of euros in additional tax revenue into the state treasury,” he told the “Augsburger Allgemeine”.

Above all, the agreement will protect German SMEs from unfair competition from multinational corporations and thus also secure jobs in Germany, explained Fratzscher. “Ultimately, not only the taxpayers will benefit from this agreement, but also the consumers, because fair competition leads to better products and lower prices.”

Overall, Fratzscher assessed the G7 agreement as an important step “in order to end the undercutting competition in taxes for companies”. At the same time, he hopes for a domestic political effect: The agreement “should now also end the debate in Germany about tax cuts for companies”. There is no longer any need to further reduce corporate taxes, “especially since these have already fallen in the last few decades”

In Fratzscher’s opinion, the federal government should use the agreement “to end and turn around the creeping process of redistributing the tax burden from companies to citizens.” The agreement is an opportunity to take tax relief from work, especially for people with middle and low incomes.

The finance ministers of the G7 countries had previously committed to the goal of a global corporate tax for Google, Facebook and Co. of at least 15 percent. Federal Finance Minister Olaf Scholz and his colleagues spoke of a “historic” agreement.

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