The Hindu Editorial Vocabulary– June 10, 2021; Day 81

Today we have collated the 10 tricky words/phrases/terms from the editorial on Supreme Court relief to journalists. Go through these words and see how many did you know already. Check their usage as well. This will surely help you to understand the sense the tricky words have conveyed in the editorial.

Encouraging accord (an official agreement or treaty): On global minimum tax

The political will shown by G7 to ensure fairness in revenue sharing is a good augury (a sign of what will happen in the future)

The Finance Ministers of the G7 nations appear to have heeded (pay attention to; take notice of) the advice to ‘never let a good crisis go to waste’ when they agreed last week to set a global minimum tax of at least 15%. With the COVID-19 pandemic having caused the world economy to shrink by an estimated 3.5% in 2020 and forced most countries to dip into their coffers (treasury) to mitigate the fallout, the seven richest nations opted to use the opportune moment to plug a key loophole in the international tax regime. In a communique (an official announcement or statement, especially one made to the media), the G7 Ministers stressed that as part of efforts to secure a ‘Safe and Prosperous Future for All’ they would strongly back the broader efforts under way through the G20/OECD to address tax challenges arising from globalisation and digitalisation of the economy. The rapid and relentless march of technological advancement, especially in the domain of global communications and connectivity, has resulted in a world economy where the digital sphere, estimated in 2016 at $11.5 trillion or over one-sixth of global GDP, is exponentially outpacing overall economic growth. The increasing digitalisation has, however, exacerbated (make (a problem, bad situation, or negative feeling) worse) the challenges to taxing multinational corporations, which have sought to minimise their total tax outgo (something that goes out) by recognising a bulk of their revenue in low-tax jurisdictions.

The OECD, which is with the G20 spearheading the ‘Inclusive Framework on Base Erosion and Profit Shifting’ initiative aimed at ending tax avoidance, estimates that countries are collectively deprived (deny (a person or place) the possession or use of something) of as much as $240 billion in tax revenue annually due to avoidance by MNCs. As the OECD’s Secretary-General noted in a statement welcoming the G7 deal, such distortions (the action of giving a misleading account or impression) “can only be effectively addressed through a multilaterally agreed solution”. The G7 also agreed on “an equitable allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises”. For India, estimated to be losing more than $10 billion in revenue each year to “global tax abuse” by MNCs according to the Tax Justice Network and one of the more than 90 countries that have joined the BEPS framework, a wider agreement at next month’s meeting of G20 Finance Ministers and central bank Governors could have far-reaching implications. India could benefit from the levy of taxes on MNCs including technology and Internet economy giants, which have taken advantage of the loopholes in the global tax system. While there are still wrinkles to be ironed out (to resolve or work out a solution), including the issue of local levies on digital transactions, the political will to ensure greater fairness and equity in revenue sharing is a positive augury.

Hope you got to know some new words/phrases which will definitely be useful in the English section of upcoming competitive exams. Wishing you all the best in your preparation!

Want to improve your vocabulary further? Download the Lists of Word-Meanings of Previous Months here.

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