SWITZERLAND: French Finance Minister Bruno Le Maire is optimistic about reaching a deal on a global tax on digital companies despite an initial failure to agree on with the United States.
“We are moving in the right direction,” Le Maire told a foreign news agency at the World Economic Forum commencing in Davos earlier on Thursday, adding that he thought France was close to striking an agreement with the United States.
READ MORE: The Davos cheat sheet for Pakistanis
US President Donald Trump and French President Emmanuel Macron discussed the issue in a phone call on Sunday, with both sides sounding positive afterwards, in contrast to the threats the US has made to impose tariffs on exports of champagne and other luxury goods in retaliation for a French digital tax.
Meanwhile, Paris and Washington failed to agree on Wednesday on how to push forward a deal that involves rewriting of decades-old cross-border tax rules.
However, they did agree to set aside their dispute as they work on the global initiative; which is being led by the Organisation for Economic Cooperation and Development (OECD) – a Paris-based club of wealthier economies.
OECD Secretary-General Angel Gurria has been working for years on finding ways to create a level playing field on digital taxation, but those efforts are now being accelerated to see if an agreement can be reached by December.
Speaking on a panel at the WEF with Le Maire, Gurria said he was hopeful to have a framework that would apply to more than 130 countries drafted by July. “We have no Plan B — we just have to get it done,” he affirmed.
The minister said, “It would be far better to have an international framework for everybody,” adding that otherwise the world would end up with a cacophony of national systems that would compound the problem.
Le Maire stated, “We just can’t go on any longer with a taxation system in which the richest companies, those that are making the biggest profits, are paying the least tax.”
