The IMF and the US on Wednesday gave a boost to the international campaign to raise taxes on wealthy firms that have done well during the pandemic in order to finance recovery efforts.

A man walks past a banner for the World Bank Group/International Monetary Fund Virtual Spring Meetings in Washington DC, the US, on Wednesday. Photo: AFP

The renewed support for tax changes comes as G20 finance ministers said they would continue to work on a minimum corporate tax aimed at undermining the use of tax havens internationally, with a deal possible by July. 

The plan also has the support of France and Germany but US President Joe Biden's administration on Wednesday took the first step by announcing it intended to raise domestic corporate taxes and clamp down on loopholes to ensure US companies making huge profits, at home or overseas, pay a minimum amount to the government.

"Destructive tax competition will only end when enough major economies stop undercutting one another and agree to a global minimum tax," US Treasury Secretary Janet Yellen said. 

Yellen this week also said she wants the G20 to reach a global agreement on taxation to prevent firms from evading levies by establishing headquarters in countries with lower rates - a practice prevalent among tech companies.

The IMF backs that idea and also argues that higher taxes on wealthy firms and individuals, even if temporary, could finance policies needed to ensure recovery from the pandemic. 

"The IMF has been calling for a minimum, global corporate income tax rate as a way to interrupt the race to the bottom in corporate income taxation," said Vitor Gaspar, head of the IMF's Fiscal Affairs Department.

Biden announced plans to raise corporate taxes to pay for a massive $2 trillion infrastructure and jobs program on March 31. 

The powerful US Chamber of Commerce however expressed opposition to raising taxes.