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Nigeria out as 136 countries agree on 15% tax for multinationals

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Nigeria has refused to join other nations to sign a historical agreement on the 15 percent taxation of multinational companies.

The agreement will see corporations pay a tax rate of at least 15 percent to their host countries.

The Organisation for Economic Cooperation and Development (OECD) disclosed this in Paris, France, on Friday.

According to OECD, the aim of the agreement was to end a practice where corporate organizations hide away their asset.

The deal will also ensure that the host countries earn $150 billion a year from the multinationals.

OECD in a note published on its website listed Estonia, Hungary, and Ireland as the last set of countries to join the agreement while Nigeria, Kenya, Pakistan, and Sri Lanka are yet to join.

India reportedly signed the agreement on Friday while China and Brazil were reluctant signatories.

The note also revealed that the deal is now supported by all OECD and G20 countries.

The United States has been the brain behind the push to enact a 15 percent minimum corporate tax rate to minimise incentives for companies to shift profits abroad to lower their tax bills.

READ ALSO: FIRS boss reveals how multinationals cheat Nigeria of N3.7tn annually

The US government also believes a global minimum tax in place will prevent companies from simply shifting their headquarters overseas.

The OECD Secretary-General, Mathias Cormann, said the agreement would make international tax arrangements fairer and work better.

He said: “Today’s agreement will make our international tax arrangements fairer and work better. This is a major victory for effective and balanced multilateralism.

“It is a far-reaching agreement that will ensure our international tax system is fit for its purpose in a digitalised and globalised world economy. We must now work swiftly and diligently to ensure the effective implementation of this major reform.”

“This landmark deal, agreed by 136 countries and jurisdictions, represents more than 90 percent of global GDP and that it will reallocate more than $125 billion of profits from around 100 of the world’s largest and most profitable multinational enterprises (MNEs) to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits.

“The deal goes beyond setting a global minimum tax — it also creates new rules for the digital era. Under the agreement, technology giants like Amazon, Facebook, and other big global businesses will be required to pay taxes in countries where their goods or services are sold, even if they have no physical presence there.”

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