German Finance Minister Olaf Scholz on Thursday said an agreement by 130 countries backing a global corporate minimum tax marked the biggest breakthrough in global taxation in decades.
“The race to the bottom in competition is over,” Scholz told reporters during a visit to Washington shortly after the agreement was reached in talks led by the Organization for Economic Cooperation and Development.
He said details still needed to be worked out, but the agreement marked “colossal progress” and would allow countries to increase investment in infrastructure and efforts to combat climate change.
Scholz said the 130 countries represented 90% of global gross domestic output and reflected huge efforts by Germany and other countries to ensure fair taxation of big technology corporations like Amazon (AMZN.O).
He said the goal was to ensure that finance officials from the Group of 20 major economies endorse the plan when they meet in Venice July 9-10, following a similar move by the Group of Seven advanced economies in London last month.
“This is the biggest progress in international taxation we have had since 10, 20, 30 years,” he said. “It’s a really big breakthrough, and it will change everything.”
Scholz said the agreement would help countries ensure they have more funding to pay for “important priorities” such as infrastructure, climate change and social spending needs.