UK Labor Party to Push Parliamentary Vote on Support for US-Proposed Global Corporate Tax Rate

Rishi Sunak, UK Chancellor of the Exchequer
Photo by Reuters Yonhap News

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 24th (local time) that the UK opposition Labour Party announced it will push for a parliamentary vote on whether to support the global minimum corporate tax rate proposed by the United States.

The US is advocating for the introduction of a global minimum corporate tax rate to stop countries from competing by lowering corporate taxes to attract businesses. The aim is to prevent large corporations from moving to countries with lower taxes by implementing a minimum corporate tax rate and to increase government revenue. Initially, the US proposed a global minimum corporate tax rate of 21%, but last week it lowered the rate to 15% and made a new proposal.

While countries like Germany and France supported the 21% proposal, some countries expressed dissatisfaction, saying 21% was too high. The Organisation for Economic Co-operation and Development (OECD) also discussed setting the global minimum corporate tax rate at 12.5%, which is the rate applied by Ireland.

The UK Treasury has stated that its priority will be how much tax to impose on large online companies and has expressed support for the US's new proposal.

The Labour Party stated that an agreement on the global corporate tax rate could increase tax revenue and prevent multinational corporations and large online companies from weakening UK businesses.

The UK currently has a corporate tax rate of 19% and plans to raise it to 25% by 2023.

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