Major economies support €547 billion boost for IMF resources

Finance ministers from the world”s largest economies agreed to boost International Monetary Fund resources by $650 billion (€547 billion) and extended a suspension on debt for poor countries until the end of the year.

But ministers said the extension would be “final” for the 73 countries eligible for a temporary suspension of debt service payments to creditors.

The resources for the IMF, meanwhile, will create an asset that countries can use to bolster their own reserves.

In a statement, members of the G20 said that after the economic contraction in 2020 “the global outlook has improved, mainly due to the roll-out of vaccination campaigns and continued policy support”.

“Nonetheless, the recovery appears clouded by uncertainty and uneven across and within countries,” the ministers said.

Also on the table further down the line will be a global corporate tax, called for by the administration of US president Joe Biden.

G20 wants corporate tax deal by July

US treasury secretary Janet Yellen had called for a minimum corporate tax, stating it was needed to stop a “30-year race to the bottom” in which countries had slashed corporate tax rates to attract multi-national businesses.

The Biden administration has proposed increasing the US corporate tax to 28%. It was slashed from 35% to 21% during the Trump administration.

Italian economy minister Daniele Franco, who chaired the G20 meeting, said Yellen had stressed “the need to set a minimum rate for multinational companies”.

Franco said it was consistent with G20 work on two pillars of global taxation: a fair allocation of profits among different countries for multinational companies and a global minimum effective tax rate.

“As you know the issue of international taxation has been on the floor over several years and what we see this year is an acceleration in the process,” Franco said.

“The G20 is expecting to reach an agreement by July, hopefully in the third meeting of ministers and governors which will be held in Venice.”

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