FirstFT: Brussels set to delay digital levy plan

Brussels is set to delay plans for its controversial digital levy until autumn in an effort to boost the prospects of a global corporate tax reform deal.

The move came after G20 finance ministers meeting in Venice over the weekend endorsed a landmark tax deal reached by G7 nations last month to set a global minimum rate and overhaul taxing rights.

The European Commission had come under intense pressure from US Treasury secretary Janet Yellen to shelve its digital tax proposal, according to people familiar with the discussions. Washington fears that a go-it-alone EU approach could threaten the global tax talks.

Brussels was due to put forward its digital levy proposals this week, but had already pushed them back to July 20.

  • More G20 news: G20 finance ministers collectively endorsed carbon pricing for the first time, describing the once-contentious idea as one of “a wide set of tools” to tackle climate change. The US in particular has historically been opposed.

Five more stories in the news

1. EU targets aviation fuel tax Brussels will propose a revamp of its 15-year-old rule book on carbon taxes to impose levies on polluting energy used in the airline and shipping industry and provide an incentive for low-emissions fuel, according to a draft legal text seen by the Financial Times.

2. Richard Branson in space The Virgin founder touched the edge of space yesterday morning, fulfilling a life-long ambition and winning bragging rights over rival Jeff Bezos in the race to open suborbital space to commercial tourism. Here is a look at how Branson and Bezos’s rocket ships compare.

The launch followed a 17-year quest marked by delay and disappointment, during which Branson burnt through more than $1bn of his personal fortune
The launch followed a 17-year quest marked by delay and disappointment, during which Branson burnt through more than $1bn of his personal fortune © Reuters

3. Euro 2020: Italy beats England The final followed the script of most of England’s big games in recent decades: take an early lead, then spend the rest of the game defending with their backs to the wall, before finally succumbing to lose on penalties. Read Simon Kuper’s match analysis. Ticketless England fans broke into Wembley Stadium to watch the game.

4. SoftBank’s second Vision Fund speeds up The fund poured about $13bn into more than 50 companies during the second quarter, according to two people briefed, marking a sharp increase in the pace of its investments. During the first three months of the year, it invested less than $2bn in fewer than two dozen companies.

5. Haiti president’s widow claims opponents plotted assassination Former president Jovenel Moïse’s widow has accused his domestic opponents of organising his assassination as prosecutors summoned leading business and political figures to face questioning. Haiti police said they had identified the men who assassinated Moïse, most of them Colombian mercenaries.

  • Read more: Haiti’s “descent into hell” looms closer after the president’s death: “Whether you loved Moïse or hated him, it’s the same reaction: a deep state of shock,” said one resident of Port-au-Prince.

Coronavirus digest

  • A senior UK minister said masks should be worn indoors after remaining restrictions are lifted in England on July 19. The governments of Scotland, Wales and Northern Ireland are taking more cautious approaches as the Delta variants spreads. How big a gamble is Boris Johnson taking?

  • The rapid spread of the Delta variant is causing economists to worry that Europe’s brightening economic outlook could be undermined.

  • The pandemic has prompted landlords to pile into alternative commercial property sectors such as warehouses, rental flats and student housing.

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The day ahead

Musk testifies over SolarCity acquisition Elon Musk has embodied Tesla for more than a decade, making himself the company’s flamboyant ambassador for the electric car revolution. Today, the showman chief executive will try to demonstrate to a Delaware judge that, whatever his prominence, he does not control the company.

Yellen meets eurozone finance ministers Brussels’ digital levy will be the main topic of discussion when the US Treasury secretary meets commission president Ursula von der Leyen and her European colleagues.

UK civil service reform The Commission for Smart Government, an independent review, said the government “must reform itself or fail” after Covid-19. Cabinet Office minister Michael Gove, who is overseeing the agenda, which launches today.

What else we’re reading

Equities, the sensible foundation for private pensions The tragedy of British pension arrangements is that the attempt to force safety on private arrangements is forcing them into collapse. Worse, it has allowed the older generation to extract the risk-bearing capacity of private sponsors for their benefit, moving the younger generation into permanent insecurity. This is a scandal, writes Martin Wolf.

Bar chart of Average real equity and bond returns, 1900-2020 (%)  showing Equities have hugely outperformed bonds across the western world

Melinda French Gates’s political awakening French Gates has progressed from an intensely private, behind-the-scenes figure to a leader comfortable in the spotlight and increasingly possessed by a singular cause. She has also joined an unusual club: tech billionaires’ former spouses who are unbound and free to chart their own philanthropic course.

Private equity’s raid on corporate Britain A proposed buyout of supermarket chain Wm Morrison is the latest example of a dramatic shift that has accelerated during the pandemic. For much of the century, the economy has been dominated by companies listed on public markets. Now, a portion of the economy is shifting into private hands.

Florida’s condo politics in the spotlight Debates over how to pay for essential repairs can often lead to infighting among building residents. There are parallels between delayed repairs to the collapsed condo in Surfside, Florida and the crippling bills some apartment owners in London are being forced to pay as landlords upgrade cladding in response to the deadly Grenfell fire four years ago.

Isabella Tree: ‘One day we won’t need nature reserves’ The conservationist and her husband Charlie Burrell developed Knepp Castle Estate into one of the world’s most daring and controversial rewilding projects. Over Lunch with the FT, Tree weighed in on bringing back biodiversity, the problem with veganism — and why cloning mammoths is a bad idea.

Work & Careers

The uneven state of vaccinations, plus wildly divergent views about what safe behaviour looks like, has divided us into an awkward mix of shakers, bumpers and fist knockers, writes Pilita Clark. Ravi Mattu argues that shifting power dynamics between leaders and staff during the pandemic demonstrates the need to accept that nothing is fixed.

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