LEADERS of the world’s biggest economies who have gathered in Rome endorsed an ambitious plan yesterday to overhaul the way countries around the world tax multinational companies, according to a senior U.S. administration official.

The official, traveling with U.S. President Joe Biden, called the agreement a historic reshaping of the rules for the global economy that will force corporations to pay their fair share of taxes. That echoed previous comments by Treasury Secretary Janet Yellen, whose support helped push forward a deal that had languished during the administration of President Donald Trump.

Yellen said the endorsement of the minimum tax would help U.S. businesses and workers, even though the deal also means that many U.S.-based companies, like the internet giants, will be paying more tax than now.

“This deal will remake the global economy into a more prosperous place for American business and workers,” Yellen said in a statement.

The pact had already won support in October, in principle, from 136 governments under the auspices of the Organization for Economic Cooperation and Development (OECD), and G20 finance ministers endorsed a framework for the agreement in July.

The G20’s endorsement of the deal stands out at a summit that looks unlikely to produce any additional substantial agreements. Leaders have failed to make serious progress on other prominent issues, including climate change and debt relief for low-income countries.

The tax pact has two sweeping objectives. It intends first to halt the effort by multinational companies to shift profits into low-tax havens through a new global minimum tax of 15 percent for multinational companies. It also attempts to address the increasingly digital nature of international commerce by taxing companies, in part, on where they do business instead of where they book profits.

While the deal has overcome some major impediments — such as getting low-tax Ireland to sign on — it faces several potential snags before it comes into force and proves effective, including the creation of a credible dispute resolution mechanism.

Signatory countries must also follow through by enacting domestic legislation to implement the new tax rules and by formally approving a multilateral convention, to be drafted by the OECD.(SD-Agencies)