G7 Seeks More Progress In Global Business Tax Reform | Invest News


FILE PHOTO: European Economic Commissioner Paolo Gentiloni, Eurogroup President Paschal Donohoe, World Bank President David Malpass, Italian Finance Minister Daniele Franco, French Finance Minister Bruno Le Maire, French Finance Minister Bruno Le Maire, Canadian Finance Minister Chrystia Freeland, British Chancellor of the Exchequer Rishi Sunak, IMF Managing Director Kristalina Georgieva, German Finance Minister Olaf Scholz, US Treasury Secretary Janet Yellen, Secretary General of the Cooperation Organization and Development Committee (OECD) Mathias Cormann, Japanese Finance Minister Taro Aso pose for a family photo during the G7 Finance Ministers meet at Lancaster House in London, Britain, June 5, 2021. REUTERS / Henry NichollsReuters

LONDON (Reuters) – Rich-country Group of Seven finance ministers said on Thursday they needed to make more progress on the fine print of reforming global corporate tax rules in time for a summit of world leaders in October.

Britain’s Rishi Sunak said he urged his G7 peers in a virtual meeting to make continued technical progress on the reforms, and US Treasury Secretary Janet Yellen stressed the need to quickly implement the new rules. .

More than 130 countries agreed this summer to develop new place-of-tax rules for businesses, adopt a tax rate of at least 15% and drop national taxes on digital services in favor of new taxing rights.

Diplomats are now pushing for an agreement at the next Group of 20 summit in October on the technical parameters of the reform.

“I said that the G7 must unite to play a leadership role in order to reach an effective agreement in October,” Japanese Finance Minister Taro Aso told reporters.

Yellen noted that the deal was backed by 134 countries representing more than 90% of global GDP, and said the new international tax system would help governments invest in their workers and their economies while leveling the playing field on which US companies are competing with each other, according to a statement. by his office.

DO MORE TO HELP VULNERABLE COUNTRIES

Sunak said on Twitter that he also called on the G7 to provide support to vulnerable countries through the International Monetary Fund’s Special Drawing Rights (SDRs), or emergency reserves, ahead of talks between ministers. Finance and central bankers in October.

The Treasury said Yellen also called for continued efforts by the G7 to step up support for low-income countries hit hard by the COVID-19 pandemic and its economic fallout.

Yellen urged major economies to lend their SDRs to further support vulnerable countries, the Treasury said, but gave no details of the United States’ own plans.

IMF chief Kristalina Georgieva, writing on Twitter, thanked Sunak and Britain for what she called “remarkable progress on ways to amplify the benefits of the new Special Drawing Rights allocation for countries in need ”at the G7 meeting.

A source close to the discussions said G7 members have expressed support for both the IMF’s Poverty Reduction and Growth Trust and a new vehicle proposed by Georgieva, the Resilience and Sustainability Fund. , to allow richer IMF members to donate or lend their reserves to more vulnerable countries. .

This is good news for the IMF, given that some G7 countries initially expressed reservations about the new confidence, which could provide aid to the poorest countries, and would cover wider spending, including fight against climate change.

A G7 source said Thursday’s meeting also focused on how to deal with the new Taliban government in Afghanistan.

“We don’t want to see a humanitarian catastrophe in Afghanistan. There must be no famine in Afghanistan,” the source said, speaking on condition of anonymity.

Britain holds the rotating presidency of the G7, which also includes Canada, France, Germany, Italy, Japan and the United States. Germany will assume the presidency of the G7 next year.

(Reporting by William Schomberg in LONDON, Tetsushi Kajimoto in TOKYO; Andrea Shalal and David Lawder in WASHINGTON Editing by David Milliken, Mark Heinrich and Sonya Hepinstall)

Copyright 2021 Thomson Reuters.


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