The world can’t rely on a 1920s tax system, Rishi Sunak tells G7

The world cannot rely upon a tax system largely originating from the 1920s, particularly in a “complex global digital economy”, Rishi Sunak has told ministers during a finance meeting of the G7 nations.

The Chancellor’s discussions with finance ministers from the US, Japan, France, Canada, Germany and Italy at Lancaster House in central London are set to continue on Saturday, when the countries are expected to come to a global agreement on how digital companies are taxed.

Mr Sunak said that securing a fair cross-country consensus on how tech firms including Google, Facebook, Apple and Microsoft were taxed was a key priority, adding that the UK wanted companies to “pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners”.

US tech firms have long been criticised over the low rates of tax they pay globally in the face of unprecedented growth, significant valuations and headline-making profits.

While the companies maintain they pay all required taxes, governments and campaigners have lobbied for significant overhauls to the ways in which the companies are allowed to engineer paying minimal corporation tax.

Chancellor Rishi Sunak welcomes secretary general of the Organisation for Economic Co-operation and Development, Matthias Corman, to the G7 Finance Ministers Meeting

Earlier this week it was revealed that a subsidiary of Microsoft in Ireland paid no corporation tax last year, despite making profits of $315bn (£222bn) – close to three-quarters of the country’s gross domestic product (GDP).

Microsoft Round Island One, which collects licence fees from Microsoft’s copyrighted software, declared it has no employees other than its directors and that it was tax resident in Bermuda, where companies are not charged corporate income tax.

Facebook paid £28.5m in UK corporation tax in 2019 after its revenues crossed £1bn, while Google paid £50m against revenues of £1.8bn. In comparison, Amazon paid £293m on the £13.73bn it made in the UK during the same year.

US President Joe Biden, who is due to attend the leaders’ summit in Cornwall next week, has backed a minimum global corporation tax level with a proposed 15 per cent base rate in a bid to stop tech multinationals from avoiding paying tax offshore.

The new rules could see the US tech firms reporting profits into their home country rather than paying the country in which they operate – something Mr Sunak is keen to avoid.

The Chancellor urged the President to agree to tougher “tech tax” rules last week because the global tax system “isn’t working”, telling the Mail on Sunday that “our American friends… need to understand why air taxation of tech companies is important to us”.

“The right companies aren’t paying the right tax in the right places,” he said. “That’s not fair and that’s something that I want to fix.”

Mr Sunak and the G7 finance ministers are expected to make an announcement on Saturday outlining any agreements reached.

Source: The i

The Everglades are dying. An alliance between Biden and Republicans could save them

Governor Ron DeSantis has signed a $3.4bn deal to restore the freshwater preserve and Biden has earmarked funds to help

The Florida Everglades, a 1.5m acre subtropical preserve. Photograph: Jupiterimages/Getty Images

For years environmental groups warned the Florida Everglades, a vast 1.5m acre (607,000 hectare) subtropical preserve, may be doomed to extinction. Agricultural pollution, saltwater intrusion, and rampant real estate development had turned the waterways toxic and the state’s iconic environmental landmark was left to slowly choke to death. Perhaps until now.

A sweeping Everglades restoration effort decades in the making is finally seeing renewed optimism thanks to a cast of unlikely champions: Florida state Republicans. In April, Ron DeSantis, the governor, signed an agreement with the US Army Corps of Engineers to build a massive $3.4bn reservoir west of Palm Beach, which would help restore the flow of freshwater to the Everglades. Other state-funded projects to revitalize the region’s delicate ecosystem are already months ahead of schedule, DeSantis said.

And now, the Everglades have a new ally in the White House. Last week Joe Biden included $350m in his 2022 budget proposal to apply toward environmental restoration efforts in South Florida, a $100m increase from the previous year. But will it be enough? Florida’s congressional delegation, led by Republican Senator Marco Rubio, had previously requested more than double that amount in federal assistance, while local advocates argued the price tag should be closer to $3bn over four years.

There’s also a possibility that Congress could add more federal dollars to Biden’s proposal, especially now that five members of Florida’s congressional delegation sit on appropriations committees, said Chauncey Goss, board chairman of the South Florida water management district, which oversees the state’s Everglades infrastructure projects. “The $725m would be better, but I am not going to laugh at the $350m,” Goss said. “It’s not exactly what we wanted, but it is really up to Congress.” Still, Biden’s proposed funding is substantial, Goss added, and will allow the army corps to begin work on the federal portion of the reservoir project, such as building new canals from Lake Okeechobee. “This will definitely keep the ball moving down the field,” he said. Efforts to restore the Everglades’ unique ecosystem hinge on Lake Okeechobee, Florida’s largest body of freshwater located near Palm Beach county. The lake has been used as a dumping ground for farmland pollutants for several decades, allowing high concentrations of phosphorus and nitrous from fertilizers to leach into the soil. During heavy rains and storms, runoff water from the tainted soil flows into dozens of intersecting canals that end up in Lake Okeechobee. To avoid the lake from overflowing and bursting its levee during storm events, the tainted water is often released into rivers that flow to the ocean and the Everglades. The goal is to treat overflowing dirty water from Lake Okeechobee so that by the time it reaches the Everglades, the water is mostly free of the nutrients that cause toxic algae blooms. Construction is currently under way to create a network of marshes spanning 6,500 acres (2,630 hectares) made up of non-native plants that act as a natural filtration system to suck up fertilizer nutrients from contaminated water, which will flow from the planned 10,500-acre (4,250-hectare) reservoir that will store excess water that builds up in Lake Okeechobee during rainy months of the year.

John Kominoski, a biological sciences professor at the Florida International University Institute of Environment, says the reservoir project will likely play a critical role in alleviating overflows in Lake Okeechobee during Florida’s wet season, which will be used to replenish the Everglades. “This reservoir is very important for Everglades restoration,” he added. “It will enable the clean up of more of the dirty water and hold more of the water longer as opposed to dumping it out to sea.” Still, environmental advocates remain split about whether the Everglades restoration projects are enough. Some worry the reservoir and the marshes will not have a meaningful impact in reversing decades of pollution and water diversion. Others are concerned the restoration could be upended by recent attempts to bring industrial and commercial activities closer to the ecosystem. Eve Samples, executive director of the advocacy group Friends of the Everglades, said the 17,000-acre (6,880-hectare) footprint for the reservoir and the adjoining wetlands are not large enough to achieve the amount of water flow to keep the River of Grass healthy. “When the project was first envisioned 20 years ago, it was in the neighbourhood of 60,000 acres,” Samples said. “In 2017, when we had the toxic algae blooms on the east and west sides of the state, the project got accelerated. But by the time the bill was approved, the reservoir and the wetlands portion were shrunken down to 17,000 acres.” One key reason the reservoir was scaled back was due to politics. The state legislature barred the South Florida water management district from using eminent domain to acquire sugar cane fields and farms. To compensate for the lost acreage, state and federal environmental agencies made the reservoir 23ft (7 metres) deep with 37ft (11 metres) high retention walls. “This project is a shadow of its former self,” Samples said. “It doesn’t look like anything in nature.” Another key worry is the compounding threat brought by climate change, Kominoski says. Weather changes in recent years have severely impacted the transition from Florida’s dry season to the wet season, which typically begins in late April and lasts until mid-November. “Last year, the wet season didn’t start until late May,” he said. “We are losing about a month of our wet season window.” As a result, mangroves and other plant life that help filter pollutants are drying out and dying. “We need water flowing so the wetlands don’t dry out,” he said. Jason Totoiu, senior attorney with the Centre of Biological Diversity’s Southeast division, agreed, noting the restoration projects like the $3.4bn reservoir and marshes can significantly increase the flow of freshwater to the Everglades as long as farm pollutants are effectively filtered out. Increasingly hotter summers are threatening large swaths of the Everglades, Totoiu said. “We are seeing an increasing amount of saltwater that can dramatically alter natural habitats,” he said. “Rising sea levels could be a tipping point there.” The reservoir project and other Everglades infrastructure proposals are about more than just revitalizing Florida’s most important ecosystem, added Julie Wraithmell, executive director of Audubon Florida. “It is also about protecting our vibrant tourism economy, the drinking water for all residents and visitors and against sea level rise,” she said. “With so many projects lined up, it makes sense to strike while the iron is hot.” Fighting to save the Everglades has been a daunting endeavor for many decades, but Republican and Democratic elected officials on the local, state, and federal levels are now putting in the work, Wraithmell added. “Whether you are far left or far right, everyone has a vested interest in dealing with the effects of climate change,” she said. “There is great reason for optimism.”

Source: Guardian

Denmark helped US spy on Angela Merkel and European allies – report

Media reports claim US National Security Agency used Danish cables to spy on senior officials

Denmark’s military intelligence agency helped the US to spy on leading European politicians including the German chancellor, Angela Merkel, according to the Danish public broadcaster and other European media.

Danmarks Radio said the US National Security Agency (NSA), whose alleged tapping of Merkel’s phone was disclosed by Edward Snowden in 2013, also used the Danish Defence Intelligence Service (FE) to spy on officials in Sweden, Norway and France.

The allegations are contained in an internal classified report on the FE’s role in the surveillance partnership agreement with the NSA from 2012 to 2014, the broadcaster said, citing nine unidentified sources familiar with the investigation.

The alleged tapping of Angela Merkel’s phone was disclosed by Edward Snowden in 2013.

It said the NSA used Danish information cables to spy on senior officials including the former German foreign minister, Frank-Walter Steinmeier, and the then opposition leader Peer Steinbrück. It was not clear whether the Danish government authorised the taps.

The Danish defence minister, Trine Bramsen, who took over the defence portfolio in June 2019, was reportedly informed of the espionage in August last year. She told Danmarks Radio that “systematic eavesdropping of close allies” was “clearly unacceptable”.

France’s Europe minister, Clément Beaune, said the reports were “extremely serious” if proven. “We need to see if our partners in the EU, the Danes, have committed errors in their cooperation with American services,” Beaune told French radio. “Between allies, there must be trust, a minimal cooperation.”

A spokesperson for the German chancellery said it became aware of the allegations only when asked about them by journalists, and declined to comment further. Steinbrück said the NSA and FE’s activities were “a political scandal”.

The former centre-left SPD party leader said he accepted western states needed intelligence services, but added it was “grotesque that friendly intelligence services are indeed intercepting and spying on top representatives of other countries”.

Danmarks Radio published the allegations on Sunday evening in a joint investigation with the Swedish public broadcaster SVT, Norway’s NRK, France’s Le Monde, and Germany’s NDR, WDR and Süddeutsche Zeitung.

The Danish broadcaster said the NSA retrieved text messages, calls and internet traffic including searches and chats thanks to its partnership with FE. Denmark, a close US ally, hosts several key landing stations for undersea internet cables to and from Sweden, Norway, Germany, the Netherlands and Britain.

Neither the agency or its director at the time, Lars Findsen, have commented on the report. Findsen and three other FE officials were suspended last year by an independent oversight board following criticism and accusations of serious wrongdoings stemming from the internal investigation, which began in 2015, Danmarks Radio said.

The NSA did not immediately respond to requests for comment. Sweden’s defence minister, Peter Hultqvist, demanded “full information” and his counterpart in Norway, Frank Bakke-Jensen, said the allegations “are being taken seriously”.

If confirmed, the spying was happening during and after the 2013 Snowden affair, when the former NSA contractor revealed thousands of secret documents exposing the vast US surveillance operation mounted after the 2001 9/11 attacks.

Snowden on Sunday accused Joe Biden, who was US vice-president at the time, of being “deeply involved … the first time around”. Snowden called on Twitter for “full public disclosure not only from Denmark, but their senior partner as well”.

The former contractor has been charged in the US with with theft of government property, unauthorised communication of national defence information and wilful communication of classified communications intelligence and is in Russia.

Source: Guardian