Connect with us

Sports

Tax deal sets bar too low, campaigners say

Published

on

Loading...

A landmark deal struck by rich nations to make multinational companies pay more tax has been criticised by campaigners for not going far enough.

G7 finance ministers meeting in London agreed to battle tax avoidance by making big companies pay more tax in the countries where they do business.

Tech giants firms likely to be impacted have welcomed the new rules.

But the charity Oxfam says an agreed 15% global minimum corporate tax rate is “far too low” to make a difference.

The deal announced on Saturday between the G7 group of wealthy nations – US, the UK, France, Germany, Canada, Italy and Japan, plus the EU – could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.

UK Chancellor of the Exchequer Rishi Sunak, who hosted the summit, said the agreement would create “a fairer tax system fit for the 21st Century”.

The G7 attendees posed for photos at Lancaster House

The deal agreed in principle that multinational companies pay a minimum tax rate of at least 15% in each country they operate.

But aid charities said the agreed rate is too low and would not stop tax havens from operating.

“It’s absurd for the G7 to claim it is ‘overhauling’ a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore,” said Oxfam’s executive director Gabriela Bucher. “They are setting the bar so low that companies can just step over it.”

She said the deal was unfair as it would benefit G7 states, where many of the big companies are headquartered, at the expense of poorer nations.

Alex Cobham, chief executive of the Tax Justice Network, called the deal a “turning point” but said it remained “extremely unfair”.

“We’ve got one step of the way today – the idea of a minimum tax rate – what we need is to make sure that the benefits of that, the revenues, are distributed fairly around the world,” he told the BBC.

The agreement will be considered at a meeting next month of the G20, including China and India.
Why did they want to change the rules?

Governments have long grappled with the challenge of taxing global companies operating across many countries.

That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.

At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.

That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.

The deal aims to stop this from happening in two ways.

Loading...

Firstly the G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.

Secondly, they want a global minimum tax rate so as to avoid countries undercutting each other with low tax rates.

Analysis

The right to tax is the essence of sovereign power. That is why co-ordinated international action is so difficult.

It has been the dream of campaigners and mainly European finance ministers for years. They would scarcely have believed it was possible until the past few months. But the need to fill coffers emptied by the pandemic, and the arrival of the Biden administration in the US, created a moment of opportunity.

There was, however, a big compromise to get this across the line. A minimum corporation tax rate of 15% is rather low. Although European finance ministers succeeded in including the phrase “at least 15%”, which offers a path to get that number higher.

How much bite this change actually has will depend on the fine print of ongoing negotiations. Tech firms say they welcomed the move. Facebook vice president Nick Clegg said they recognised it could mean the company “paying more tax, and in different places”.

And then there is the question of the rest of the world. This now goes from the G7 to the wider G20 group, including China, Russia and Brazil, and then beyond.

A process has begun, a precedent has been set. It may or may not end up being transformative, but this moment is historic.

How would the agreement work?

The rules on making multinationals pay taxes where they operate – known as “pillar one” of the agreement – would apply to global companies with at least a 10% profit margin.

Twenty percent of any profit above that would be reallocated and taxed in the countries where they operate, according to the G7 communiqué.

US Treasury Secretary Janet Yellen said there was an understanding that national digital services taxes such as those levied by the UK and EU countries would be scrapped and replaced by the new agreement. Such taxes are regarded by the US as unfairly targeting American technology giants.

“The timing remains to be worked out exactly but there is broad agreement that these two things go hand in hand,” the treasury secretary said.

Low-tax Ireland – which risks losing out from the deal – says the concerns of smaller countries must be heeded.

How have the corporations reacted?

Tech giants gave it an upbeat assessment.

“We want the international tax reform process to succeed and recognise this could mean Facebook paying more tax, and in different places,” said Facebook’s Nick Clegg.

A spokesperson for Amazon said the agreement is a “step forward” in bringing “stability to the international tax system”.

A spokesperson for Google said: “We strongly support the work being done to update international tax rules. We hope countries continue to work together to ensure a balanced and durable agreement will be finalised soon.”

The post Tax deal sets bar too low, campaigners say appeared first on KBC | Kenya's Watching.

Loading...

Sports

Sewage Menace in Pipeline, Residents Cry For Help

Published

on

Loading...


Get real time updates directly on you device, subscribe now.

By Milo George

Residents of Pipeline Transami area are decrying poor drainage system that has caused sewage water to overflow in their area of residence.

The residents claim that the overflowing sewage is not only putting their lives at risk but also causing air pollution.

They have called on Nairobi Metropolitan Services and Nairobi City Water and Sewage Company to come on board and expand the sewer lines before more areas are flooded with raw human wastes coming from the blocked pipes.
“We want Major Badi and our leaders to resolve this menace immediately. It’s terrible many have been forced to shift their businesses because of the foul smell,” they said.
Pastor Joe Ndivoh of Word Evangelistic Explosion Ministries says that they have been forced to call off the Sunday School Service to protect the children from the smelly sewage.
‘‘We now fear that if prompt action is not taken then we will have a bigger health problem than this because we fear there could be an outbreak of water-borne disease anytime,’’ Pastor Ndivoh added.


Get real time updates directly on you device, subscribe now.

Loading...

Loading...
Continue Reading

Sports

Solberg Jnr replaces Pierre-Louis for WRC Safari – KBC

Published

on

Loading...

Hyundai Motorsport World Rally Team has made a change to it’s WRC2 team for Safari replacing Pierre-Louis Loubet with 19 year old Oliver Solberg.

KBC Radio_KICD Timetable

The change of crew hands young Solberg an opportunity to resume his family dream on the fabled Safari which was first held from 27 May to 1 June 1953 as the East African Coronation Safari in Kenya, Uganda and Tanganyika as a celebration of the coronation of Queen Elizabeth II.

Solberg Senior finished the WRC Safari 5th on the 1999 and 2000 editions driving a Ford Focus and navigated by his eventual Championship- winning navigator Phil Mills. In 200 and 2002, Petter retired on Safari after he lost a wheel and suffering engine gremlins on both occasions.

Oliver was forced to withdraw from last week’s Rally Italia Sardegna after his father, 2003 WRC champion Petter Solberg, tested positive for coronavirus.

Get breaking news on your Mobile as-it-happens. SMS ‘NEWS’ to 20153

Oliver was gearing up for his second top flight World Rally Championship outing with Hyundai at last weekend’s s Italian event.

However having been in contact with his father, Oliver was compelled to remain in quarantine in a hotel in Porto for 14 days as per the FIA Appendix S regulations.

The FIA’s Appendix S COVID-19 protocol and national government regulations offer clear quarantine instructions for those in close contact.

“You can imagine, I am more than disappointed by this news. I am a little bit devastated,” The 19-year-old Solberg told www.motorsport.com last week.

Loading...

WRC Safari Rally Event Secretary Helen Shiri confirmed Oliver’s Safari participation saying: “Hyundai WRC 2 team car number 7 has changed the crew from Driver Pierre-Lous and co-driver Florian Haut-labourdette both from France to Oliver Solberg (Swedish) and  Co-driver Aaron Johnston (Ireland). The car, a Hyundai i20 Coupé, remains intact.”

Meanwhile, it’s been a meteoric rise for the son of world champion Petter.

Less than two years after his maiden rally in a four-wheel drive car, the teenage sensation was competing at the WRC’s top level.

Aged just 17, Oliver became the youngest winner of a European Championship rally in 2019.

With a father and a mother from a well-known Swedish motorsport family and a former Production WRC competitor in her own right, there was a sense of inevitability that a career at the wheel was inevitable for Oliver Solberg. 

Solberg’s early years were spent racing in crosskarts.

In 2012 he won the Norwegian Championship before a step up to a higher class brought consecutive title wins in 2014, 2015 and 2016.

In 2019 Solberg stepped into R5 machinery, driving a Volkswagen Polo GTI R5 in the Latvian/Estonian/Baltic Rally Championship. He took to the increased power immediately and racked up five class wins on his way to the championship title.

He also followed in his father’s footsteps to join Subaru Motorsports USA. He drove a latest-spec Impreza STI, winning three of the six rounds

After making his WRC debut at the 2019 Rally GB, Solberg stepped into a full WRC campaign in 2020, driving his own Polo R5 alongside a partial campaign with Skoda Motorsport.

The WRC returns to Africa for the first time since 2002. The Safari of old has evolved to fit the modern-day WRC, but its character remains with challenging closed dirt roads, stunning picture-postcard scenery and exotic wildlife.

KBC-You-tube-728x90-New-2

Tell Us What You Think


Loading...
Continue Reading

Sports

Three more suspected robbers arrested along Southern by-pass – KBC

Published

on

Loading...

Three more suspects have been arrested in connection with the recent spate of robberies targeting motorists along the Southern by-pass.

KBC Radio_KICD Timetable

The three were arrested in Kibra by detectives based in Langata.

Their arrest follows a detailed analysis and investigations of the robberies, with detectives employing cyber and forensic analysis techniques to identify the beneficiaries of the crimes.

Boniface Winjira Unganyi, the proprietor of Basement Crew mobile shop within Lindi in Kibra, was arrested as the key suspect after a total of 102 mobile phones suspected to have been stolen from victims were recovered from his shop.

Loading...

Get breaking news on your Mobile as-it-happens. SMS ‘NEWS’ to 20153

Also arrested were 35-year-old Alex Mboya, who was found in possession of a victim’s phone, and a 16-year-old minor, studying at a secondary school in Langata.

Five other suspects have been arraigned in recent weeks in connection with the violent robberies.

KBC-You-tube-728x90-New-2

Tell Us What You Think


Loading...
Continue Reading
Advertisement
Loading...
Advertisement
Loading...

Trending

Kenyan Tribune