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The two-day G20 finance ministers and central bank presidents meeting opened in Venice, Italy on Friday. This is the first face-to-face meeting between the G20 finance ministers since the outbreak. The primary agenda is corporate tax reform and support the recent global taxation agreements reached by 131 countries and regions. The reform agreement imposes a minimum 15% tax rate on multinational companies. The G20 finance ministers meeting will issue a communiqué calling for speeding up the global vaccine distribution.
Reuters reported that 130 countries of the Organization for Economic Cooperation and Development last week supported the formulation of new corporate tax locations and tax rates, and it is expected that G20 countries will also provide political support.
The agreement proposes to set the global minimum corporate tax rate at at least 15%. The OECD estimates that this may increase global tax revenue by about $150 billion, but most details are still to be finalized.
It is said that the two-day meeting in Venice, Italy will discuss how to put the OECD proposal into practice, and strive to reach a final agreement at the October G20 summit in Rome.
The G20 members account for more than 80% of the global GDP, 70% of global trade and 60% of the earth’s population, including the United States, Japan, the United Kingdom, France, Germany, and India.
If everything goes according to plan, the new tax rules should become binding global legislation before the end of 2023.
Treasury secretaries of various countries may seek assurances from U.S. Treasury Secretary Yellen that she can allow the bill to be approved by legislation in the divided U.S. Congress. Republicans and business groups opposed Biden’s proposal to increase taxes on companies and the wealthy in the United States.
In addition to tax issues, the G20 finance ministers will also discuss global economic recovery. Officials from Italy, the rotating G20 presidency, told reporters that the uneven recovery is quite obvious. The wealthy Western countries have rebounded strongly, while the developing countries have fallen behind.
International Monetary Fund President Georgieva also delivered the same message this week, stating that there are “dangerous differences” between rich countries and developing countries as they seek to recover from the new crown epidemic.
In addition, according to the latest version of the Joint Communiqué, the finance ministers at the meeting called for speeding up the global distribution of new crown vaccines, drugs and screening reagents, but there is no new substantive commitment.
The joint communiqué is expected to be released at the end of the meeting on Saturday. Reuters has obtained the documents in advance. Two officials familiar with the matter said that the final communiqué will not be changed.
The document shows that although the finance ministers of the Group of 20 are determined to bring the epidemic under control as soon as possible, they have not made any new substantive commitments to donate vaccines and financially support the fair distribution plan of vaccines and medical supplies jointly led by the WHO.
Finance ministers of various countries will call on the public and private sectors to “distribute safe, effective, quality-guaranteed, and affordable vaccines globally” to address the remaining gaps in the plan.
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