The G20 finance ministers, meeting from Wednesday 24 to Friday 26 July in Rio de Janeiro, Brazil, pledged in their declaration published on the final day “to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed”.
“With full respect to tax sovereignty”, they said that this cooperation could “involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices”. They also encouraged the OECD/G20 Inclusive Framework on BEPS to consider working on these issues in the context of effective progressive tax policies.
The Organisation for Economic Co-operation and Development (OECD) published four reports on tax transparency and the link between taxation and inequality yesterday, noting in particular a renewed interest in tax policy options aimed at tackling inequality, particularly by taxing High-Net-Worth Individuals (HNWI) (see EUROPE 13422/16).
The ministers also stated that they “expect the UN Member States to engage in the discussions in good faith and in the spirit of cooperation, considering the aspirations of both developing and developed countries for strengthening international tax cooperation and making it fully inclusive and more effective”.
Gabriel Zucman, professor of economics and founding director of the EU Tax Observatory, welcomed this statement in a press release on the same day: “It’s an important step in the right direction.” “In just five months, considerable progress has been made, and let me say that Brazil’s Finance minister, Fernando Haddad, has shown great leadership in the process”, he added (see EUROPE 13440/19).
“For the first time in history, the world’s largest economies have agreed to cooperate to tax the ultra-rich. Finally, the richest people are being told that they can’t game the tax system or avoid paying their fair share”, said Susana Ruiz, head of tax policy at the NGO Oxfam International, in a press release. She also said that, at the G20 summit in November, “leaders need to go further than their finance ministers and back concrete coordination: agreeing on a new global standard that taxes the ultra-rich at a rate high enough to close the gap between them and the rest of us”.
The G2O Finance ministers also called on the Platform for Collaboration on Tax, international organisations and other development partners to strengthen capacity-building frameworks. Finally, they invited them to facilitate the implementation of progressive tax systems focused on reducing inequalities and promoting economic growth.
Read the ministers’ statement: https://aeur.eu/f/d5q (Original version in French by Anne Damiani)