US Treasury Secretary Scott Bessent calls for ‘revenge tax' to be scrapped after meeting with Albanese, Chalmers
US Treasury Secretary Scott Bessent has called on Republican lawmakers to scrap section 899 – known as the 'revenge tax' - after Prime Minister Anthony Albanese and Treasurer Jim Chalmers spoke to him directly.
The section 899 in President Donald Trump's 'big beautiful bill' would allow the US to implement retaliatory taxes on nations his administration believes unfairly treats US firms – such as tech giants Meta and Alphabet.
On Friday, Bessent posted on X that after months of productive dialogue, a 'joint understanding' among G7 countries would be announced.
Bessent said that under the agreement, the 15 per cent global corporate minimum tax would not apply to US companies under "Pillar 2" of the OECD tax deal.
He added: "We will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months."
On Friday, Mr Albanese told reporters in Sydney he had spoken to Secretary Bessent on the sidelines of the G7 in Canada earlier this month about section 899.
"This would (have had an) adverse impact on Australian investment if it had had been implemented, particularly on investment from superannuation companies," Mr Albanese said.
"One of the things that we held earlier this year in Washington DC was a round table of Australian investment funds that are willing and keen to invest in the United States - it's just one way in which the Australia-US economic relationship is an important one."
Treasurer Jim Chalmers on Wednesday told reporters he had discussed section 899 with US Treasury Secretary Scott Bessent and made Australia's case against the looming tax.
'I've engaged a lot with Australian investors over the course of the last couple of weeks on their concerns,' Mr Chalmers said.
'I was able to represent them and raise their concerns directly with US Treasury Secretary Bessent and I know that the Treasury Secretary is very focused on these issues as well.
'We hope that they can be resolved. We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress.'
Investors have expressed caution about investing in the United States over growing uncertainty surrounding section 899.
Bessent's announcement comes after prominent House Republicans said on Wednesday that Section 899, which drew opposition among some in the party and US corporate interests, could be removed from the bill.
Republicans are pushing for final votes as early as Saturday on the sweeping fiscal package, which extends 2017 tax cuts for individuals and adds new breaks, so that Trump can sign it into law before the July 4 U.S. Independence Day holiday.
"This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond," Bessent said.
AMP economist My Bui said the 'revenge taxes' would make the US a 'less attractive' investment destination and that Australian super funds are rethinking how they will deploy their capital in the future.
-with Reuters
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