IMF Welcomes US Corporate Minimum Tax Rate Initiative (Comprehensive)

Welcoming US-Led Global Corporate Tax Increase
Positive Evaluation of US Stimulus... Growth Rate Expected to Rise by 0.7%

[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."

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

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

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

The United States is attempting to raise international corporate tax rates, considering that tax increases such as raising the corporate tax rate to fund large-scale infrastructure investments could lead to a decline in competitiveness of U.S. companies if other countries lower their corporate tax rates.

Gopinath positively evaluated the Biden administration’s economic stimulus measures and infrastructure investments, stating that the U.S.'s large-scale fiscal input is driving growth. IMF Managing Director Kristalina Georgieva also expressed strong support for the U.S.'s infrastructure investment and its engagement in the international economy, expecting that U.S. infrastructure investment will raise growth by 0.7%.

In the World Economic Outlook report released that day, the IMF forecasted that the global economy will grow by 6.0% this year, an increase of 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.

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