Tax reform tops agenda as G20 finance chiefs meet in Venice

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People sit at outdoor tables in St Mark’s Square as Italy lifts quarantine restrictions for travelers from European Union countries, Britain and Israel and starts offering COVID-free flights in a bid to revive the tourism industry, in Venice, Italy, May 16, 2021. REUTERS / Manuel Silvestri // File photo

VENICE, July 9 (Reuters) – Finance ministers and central bankers from the group of 20 rich countries will meet on Friday for the first time since the start of the COVID-19 pandemic at a rally in Venice where the reform of corporate taxation will be at the top of the agenda.

The G20 is expected to give political backing to plans for new rules on where and how much business tax is imposed, which was backed last week by 130 countries in the United Nations-based Organization for Economic Co-operation and Development. Paris.

The deal contemplates a global minimum corporate tax of at least 15%, a level that the OECD estimates could generate around $ 150 billion in additional global tax revenue, but leaves much of the detail behind. to define.

Officials said the two-day meeting in the historic Italian lagoon town will open a discussion on how to put the OECD’s proposals into practice, with the aim of reaching a final deal at the summit of EU leaders. G20 in Rome in October.

G20 members represent over 80% of the world’s gross domestic product, 75% of world trade and 60% of the planet’s population, including the United States, Japan, Great Britain, France, Germany and India.

If all goes according to plan, the new tax rules are expected to be translated into binding legislation around the world before the end of 2023.

Ministers can ask U.S. Treasury Secretary Janet Yellen for reassurance she can get legislative approval for proposals in a divided U.S. Congress where Republicans and business groups fight proposed tax increases by Joe Biden on Corporations and Rich Americans. Read more

Besides taxes, ministers will discuss a global economic recovery that officials of Italy’s G20 president said was hugely uneven, with wealthy Western countries picking up sharply while developing countries were left behind.

The head of the International Monetary Fund, Kristalina Georgieva, delivered the same message this week, saying there was a “dangerous divergence” between rich countries and developing countries as they seek to recover from the pandemic of COVID-19.

The G20 will ask the IMF to allocate $ 650 billion of its reserve asset known as Special Drawing Rights by the end of August, with a recommendation to find ways to ensure that a significant portion of the money goes to the countries most in need.

Some delegations present at the meeting may express their fears that rising inflation and interest rates in the United States will throw the global economy out of balance, G20 officials said, although it is unlikely to do so. appears in the final press release.

G20 ministers and central bankers will meet from 1.15 p.m. to 5.30 p.m. (1115-1530 GMT) on Friday and from 9.45 a.m. to 5.15 p.m. (0745-1515 GMT) on Saturday, followed by a closing press conference by the Italian Presidency.

Side events include a tax symposium on Friday and a climate change conference on Sunday.

Reporting by Gavin Jones; Editing by Aurora Ellis

Our standards: Thomson Reuters Trust Principles.


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