The Group of 20 (G20) finance ministers announced their endorsement for a global tax reform that included setting a minimum corporate tax rate at 15%. The grouping further urged more countries to come aboard the historic decision. 

About 132 countries have previously demonstrated their support for the international tax reform initiative. However, the support of a world major alliance such as the G20 would further promote the cause and is likely to encourage more nations to agree to the taxing standards, which was agreed upon earlier this month. 

A final joint statement released after two days of deliberations in Italy’s Venice read, “We have achieved a historic agreement on a more stable and fairer international tax architecture. We endorse the key components of the two pillars on the reallocation of profits of multinational enterprises and an effective global minimum tax”, according to reports from AFP.

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United States Treasury Secretary Janet Yellen, who was also the country’s diplomatic representative at the G20 summit, called for immediate implementation of the new tax rates.

She said, “The world is ready to end the global race to the bottom on corporate taxation, and there’s broad consensus about how to do it — with a global minimum tax of at least 15%”, she said while showing support for a tax slab for major companies around the world, according to reports from AFP.

Even though a substantial number of countries have backed the global minimum tax rate, a handful of developing economies have held out from agreeing to it, mostly from the European Union. Countries like Ireland, Estonia and Hungary have previously welcomed companies with a high revenue margin to set up shop with lower tax rates. 

The new global tax slab is not likely to impact more than 10,000 companies worldwide, however, the Organisation for Economic Co-operation and Development has projected that a sum of at least $150 billion would be generated with the policy change.