Corporate tax rates in major economies around the world have fallen to an average of just 25.1% this year, according to a study released Friday by the UHY international accounting firm network.

With the COVID-19 pandemic leaving a gaping hole in the public finances of many countries, however, UHY predicts the trend of declining corporate tax rates worldwide is likely to be over for the foreseeable future. For example, the U.K. government recently announced its intention to raise corporate tax rates to 25% starting in April 2023, more than two percentage points higher than the European average. Argentina has already increased its headline corporate tax rate from 30% to 35% in 2021. President Biden has also pledged to raise federal corporate income tax to 28% in the U.S. after it was cut to just 21% by former President Trump in 2017, although Biden’s tax proposals have been facing resistance from Republicans and some Democrats in Congress and he was unable to pass the Build Back Better Act last year.

Global corporate tax rates have been steadily declining in recent years, with the G7 average for a business recording profits of $1 million falling from 32% in 2014-2015 to just 26% in 2020-2021. Many countries have tried to incentivize companies to invest in their economies by offering enticing tax rates. France, often seen as a higher tax European economy, has lowered its headline tax rate from 31% to 26.5% in the past three years.

“Countries around the world have wanted to remain competitive by keeping the tax burden on companies as low as possible in recent years,” said UHY chairman Subarna Banerjee in a statement. “The cash-strapped governments of 2022 will likely now be considering increasing taxes on corporates. Public finances will have to be shored up somehow and corporates can be an easier target politically than individuals. Businesses worldwide should be prepared for their tax costs to begin to rise in the coming years.”

The Netherlands recently decreased its corporate tax rate to 16.5% for companies with taxable income under $450,000, while Croatia now offers a rate of just 10% for companies with a turnover of less than $1,125,000.

The Organization for Economic Cooperation and Development announced in October that 136 countries had signed a deal to enforce a minimum corporate tax rate of 15% starting in 2023. The OECD deal will allow countries to tax multinationals that make sales within their jurisdictions even if they lack a physical presence there. As a result of growing political pressure, some lower-tax jurisdictions will probably now have to increase their corporate tax rates for multinational companies, UHY predicted. Countries such as Ireland have come under fire for their low corporate tax rate of just 12.5%.

Treasury Secretary Janet Yellen has been pushing for countries like Poland to agree to the OECD deal, although the minimum tax deal is facing skepticism in the U.S. from Republicans and some Democrats in Congress. Such a deal may require the Senate to ratify new tax treaties, which would be unlikely to happen.

Multinational corporations have become one of the biggest targets for government clampdowns worldwide, with some multinationals choosing to operate from lower-tax countries, as they record lower profits in higher-tax countries. 

Developing nations surveyed by UHY generally already had higher corporate tax rates than their more economically developed counterparts. India’s tax rates increased to 34% for the largest corporations, with Nigeria implementing a headline rate of 32%, and Argentina charging its resident companies 35% on their profits.

Some countries may be hesitant to raise taxes further than the high levels they now levy. Japan already taxes its companies at rates up to 38.2%, while Malta has similarly high rates at 35%.