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The finance ministers of the major G20 economies have approved an important milestone in allowing multinationals to channel their profits to low-tax havens.
At a meeting in the Italian city of Venice on Saturday, ministers also acknowledged the need to ensure fair access to vaccines in the poorest countries.
The draft communiqué issuing the rubber stamp at the meeting did not contain any specific new proposals on how to do so.
The tax deal would be the biggest new policy initiative to emerge from their talks.
He has been discussing the issue for eight years and the goal is to give national leaders a final blessing at the October G20 summit in Rome.
The treaty would impose a global corporate tax of at least 15 percent to prevent multinationals from buying the lowest tax rate.
High-profit multinationals like Amazon and Google would also change the way they collect taxes, based in part on where they sell products and services, rather than locating them at their headquarters.
German Finance Minister Olaf Scholz confirmed to reporters that all G20 economies were in favor of the treaty, and that US Secretary of the Treasury Janet Yellen would still be encouraged to sign some small countries that oppose it, such as low-tax Ireland and Hungary. up for October.
“We will try to do that, but I have to stress that it is not essential that all countries be on board,” he said.
“This agreement has a kind of enforcement mechanism in place to ensure that the countries that are affiliated are not capable of weakening it, using tax havens that undermine the functioning of this global agreement.”
G20 members make up more than 80% of the world’s gross domestic product, 75% of world trade and 60% of the world’s population, including major hitters in the United States, Japan, Britain, France, Germany and India.
In addition to the European Union’s accessions to Ireland, Estonia and Hungary, other countries that have not signed are Kenya, Nigeria, Sri Lanka, Barbados and St Vincent and the Grenadines.
Among other sticky points, President Joe Biden in the US Congress could cause problems in the fight over tax increases for corporations and wealthy Americans, as a plan to separate the digital tax on EU technology companies could also be affected.
U.S. Treasury officials have said the EU plan is not in line with a comprehensive global agreement, although the tax is largely aimed at European companies.
Recovery of two tracks
Beyond the tax deal, the G20 will address concerns that variants of the rapidly spreading Delta coronavirus, along with unbalanced access to vaccines, pose risks to global economic recovery.
Citing improvements to the global outlook so far, the draft statement said: “However, the recovery has large disparities between countries and countries and continues to be in decline, especially with new variants and vaccination rates of the COVID-19 virus.”
A Reuters news agency reported that new COVID-19 infections are on the rise in 69 countries, with the daily rate rising as of the end of June and now 478,000.
“We all need to improve vaccine performance in all parts of the world,” French Finance Minister Bruno Le Maire told reporters.
“We have very good economic forecasts for the G20 economies and the only obstacle to a quick and strong economic rebound is the risk of a new wave.”
NDF CEO Kristalina Georgieva said the world has a “worse two-way recovery” due to inequalities in vaccine availability.
“This is a critical moment that calls for urgent action by G20 and policy makers around the world,” he said in an appeal at the end of the meeting.
Although the communication emphasized support for a “fair shared world” of vaccines, it did not propose any specific new measures, the IMF, the World Bank, the World Health Organization and the World Trade Organization only agreed to consider a $ 50 billion recommendation on new vaccine funding.
The IMF is urging G20 countries to decide on a clear path so that rich countries can provide $ 100,000 billion worth of newly issued IMF reserves to poorer countries.
Geoffrey Okamoto, the NDF’s first deputy director, told Reuters that his goal is to present a viable option to focus on countries that need newly issued special rights by the end of the new $ 650 billion end of August.
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