IMF Welcomes US-Led Global Minimum Corporate Tax Rate Increase

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The International Monetary Fund (IMF) has expressed support for the introduction of a global minimum corporate tax rate, which the United States has advocated.

Gita Gopinath, IMF Chief Economist, said on the 6th (local time) during a press briefing on the World Economic Outlook, in response to a question about the global minimum corporate tax rate proposed by the U.S. government, "We are very much in favor of setting a global minimum corporate tax rate."

Gopinath also pointed out that the differences in corporate tax rates between countries are a major concern as they lead to significant tax burden shifting and tax avoidance.

She revealed that the IMF is reviewing the Biden administration's plan to raise the corporate tax rate from the current 21% to 28%, and noted that the corporate tax rate cuts under former U.S. President Donald Trump had less impact on investment than expected.

Gopinath also expressed the view that "after large-scale spending to contain the spread of the novel coronavirus (COVID-19) and mitigate economic damage, governments need to replenish their coffers."

One day earlier, U.S. Treasury Secretary Janet Yellen mentioned that the United States is cooperating with the Group of Twenty (G20) ahead of the IMF and World Bank (WB) Spring Meetings to introduce a global minimum corporate tax rate.

The United States is attempting to raise international corporate tax rates, considering that tax increase measures such as raising corporate tax rates could be adversely affected by other countries lowering their corporate tax rates.

U.S. media interpreted this as the United States abandoning isolationism and revising its diplomatic policy toward interventionism, aiming to lead global economic leadership.

Meanwhile, in the World Economic Outlook report released on the same day, the IMF forecasted that the global economy will grow by 6.0% this year, up 0.5 percentage points from the January forecast of 5.5%.

The IMF projected that the U.S. economy will lead the global economic recovery with high growth rates of 6.4% this year and 3.5% next year.

Gopinath positively evaluated the Biden administration’s proactive fiscal spending, stating that the large-scale fiscal input by the United States is driving growth.

This content was produced with the assistance of AI translation services.