On the second day of its work, which began Friday in the Italian city of Venice, the Group of Twenty richest countries in the world are supposed, Saturday, to give a political green light to the agreement on taxes on multinational companies, which was agreed mainly by 131 countries and will likely shake international tax systems for a long time.

The rules of this tax change are supposed to be finalized by imposing a global tax of “at least 15 percent” to end tax havens and fees for companies in the countries where they make profits, by October, to be implemented in 2023.

“This minimum corporate tax should be ambitious and put an end to the race for the lowest tax that has turned into a complete deadlock for years,” French Economy Minister Bruno Le Maire told AFP.

He said that countries that represent 85 percent of GDP are seeking to “tax in a fair way the giant digital groups that are massively tax evaders, and that’s something that no one can accept.”

A number of G20 countries, including France, the United States and Germany, are campaigning for a tax of more than 15 percent, but they are not expected to move in this direction before the next meeting of the 19 richest countries in the world and the European Union in October.

“We are now really on the road to an ‘agreement’ that will soon be completed,” German Finance Minister Olaf Scholz told US financial news channel CNBC on Friday.

But many members of the OECD Working Group, which reached a preliminary agreement on July 1, remain opposed to the agreement, such as Ireland and Hungary.

Ireland has imposed a 12.5 percent tax since 2003, which is very small compared to other European countries, which allowed it to receive the European headquarters of many giant technology groups such as Apple and Google.

Fee distribution

The first objective of this amendment is to ensure a fair distribution among states of the rights to tax the profits of multinational corporations. The British Petroleum group, for example, is present in 85 countries.

The companies targeted are “the world’s 100 most profitable groups that alone generate half of the world’s revenue”, said Pascal Saint-Aman, director of the Center for Tax Policy and Administration at the Organization for Economic Cooperation and Development, the four major technology groups: Google, Amazon, Facebook and Apple (Gava).

As for the minimum global tax, the second pillar, it will affect less than ten thousand large companies, which are those whose turnover exceeds 750 million euros annually.

The Organization for Economic Development and Cooperation said the 15 percent threshold could allow for an additional $150 billion in annual revenue.

Under the presidency of Italy, the G20 finance ministers held their “in attendance” meeting for the first time since their meeting in Riyadh in February 2020 at the beginning of the spread of the Corona virus.

Among the attendees were US Treasury Secretary Janet Yellen, European Central Bank President Christine Lagarde and International Monetary Fund Managing Director Kristalina Georgieva, who traveled from their workplaces, but China and India chose to participate by default.

As police barricades encircle the Arsenal neighborhood where the meeting is being held, hundreds of anti-G20 protesters are expected to gather in Venice on Saturday afternoon.

Helping weak countries

A draft statement obtained by Agence France-Presse revealed that the Group of Twenty will support the International Monetary Fund’s initiative to increase aid to weaker countries in the form of a new issuance of special drawing rights worth 650 billion dollars. It will demand that this be “quickly implemented by the end of August”.

United Nations Secretary-General Antonio Guterres on Friday welcomed the increase in IMF reserves and urged G20 members to “solidate” with developing countries.

“Solidarity requires rich countries to direct the unused portion of these funds to developing countries,” he said.

In the face of inequality in the face of the Covid-19 epidemic, the G-20 is supposed to look again at the fate of the poorest countries that “risk losing the race against the virus,” in the words of the International Monetary Fund.

(AFP)