G20 pledges to work together to tax ultra-rich
- In Reports
- 03:33 PM, Jul 27, 2024
- Myind Staff
G20 nations have agreed to collaborate on ensuring that the super-rich pay their taxes, but fell short of reaching a more substantial agreement, according to a declaration adopted on Friday following a meeting of finance ministers in Rio de Janeiro.
The contentious issue of addressing tax-dodging billionaires dominated the two-day meeting in the Brazilian city, which is set to host a G20 summit in November.
The initiative is a key priority for Brazilian President Luiz Inácio Lula da Silva, who is leading the G20 this year. This grouping includes the world’s major economies, the European Union, and the African Union.
Lula had been hoping for a minimum tax on the wealthy, but the final statement represents a compromise on a topic that divided member states.
"With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed," said the statement.
"Wealth and income inequalities are undermining economic growth and social cohesion and aggravating social vulnerabilities."
Brazil's Finance Minister Fernando Haddad said that "from a moral point of view it is important that the twenty richest nations consider that we have a problem, which is to have progressive taxation on the poor and not on the rich."
The United States and Germany rejected the need for a global agreement on taxing billionaires, while France, Spain, South Africa, Colombia, and the African Union supported the initiative.
French economist Gabriel Zucman, who authored a report on taxing the rich, welcomed the fact that "for the first time in history, there is now a consensus among G20 countries that the way we tax the super-rich must be fixed."
"Now it is time to go further," said Nobel Prize-winning economist Joseph Stiglitz on Friday, urging heads of state to coordinate minimum standards by November.
"The climate crisis is expected to cost trillions of dollars every year and it is outrageous to expect that the regular taxpayer should pay for it, while the super-rich evade taxes," said Camila Jardim of Greenpeace Brazil.
On the sidelines of the contentious tax discussions, US Treasury Secretary Janet Yellen and Brazilian Economy Minister Haddad announced on Friday the signing of a partnership on climate protection.
Founded in 1999, the G20 originally focused on global economic issues but has increasingly addressed other pressing challenges, even though member states often disagree on the agenda.
Divisions within the G20, which also includes Russia, have made it challenging to draft a joint communiqué at the end of meetings.
Brazilian authorities published three texts: a joint final communiqué, a document on "international cooperation in tax matters," and a separate communiqué from Brazil on geopolitical crises.
The final communiqué does not mention the wars in Ukraine and Gaza specifically but refers to "wars and the escalation of conflicts" as risk factors for the global economy.
Image source: AFP
Comments