BRUSSELS´╝ŹFinance ministers from the Group of Seven, or G7, nations will vow this week to support their economies as they emerge from the pandemic and reach an “ambitious” deal on a minimum global corporate tax in July, a draft communique showed.

G7 officials, set to meet in London on Friday and Saturday, will also say that once the recovery is well established, they will need to “ensure long-term sustainability of public finances”, which is understood to be code for a gradual withdrawal of stimulus.

The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada.

“We commit to not withdrawing policy support too soon and investing to promote growth, create high-quality jobs and address climate change and inequalities,” the draft communique seen by Reuters said.

“Once the recovery is firmly established, we need to ensure the long-term sustainability of public finances to enable us to respond to future crises,” the draft said, without specifying how the G7 would deem the recovery to be considered well established.

Reviving economies

G7 governments have been pumping trillions of dollars into their economies to keep them alive since March 2020 as repeated lockdowns early in the pandemic shoved the world into a deep recession.

To help alleviate the strain on public finances, the draft said the G7 strongly supported the efforts of the Organisation for Economic Cooperation and Development, or OECD, to set a global minimum corporate tax level that would ensure large multinationals paid their fair share of taxes.

Such a tax would aim to solve the problem of large companies that generate huge revenues but pay very little tax because they set up offices or regional headquarters in low-tax jurisdictions.

The solution the OECD is working on would force a minimum global level of tax on all corporate revenues, no matter where a company chooses to set up its headquarters for tax purposes.

“We commit to reaching an equitable solution on the allocation of taxing rights and to a high level of ambition on the rate for a global minimum tax,” the draft said, without mentioning any numbers.

The United States last month proposed a minimum tax of 15 percent, down from the 21 percent it proposed in April. The lower level seemed to quickly receive broad backing in Europe.

The draft said there was an overwhelming moral, scientific and economic case for ensuring wide access to COVID-19 vaccines, as the global economy would not be safe until the virus is under control everywhere.

Agencies via Xinhua