G20 countries agree on need to tax billionaires

WEB DESK: G20 finance ministers are poised to take a significant step towards international cooperation on taxing the ultra-wealthy, with a preliminary agreement anticipated in Brazil on Friday.

The proposed deal is expected to encourage individual nations to enhance their own tax measures, rather than establishing a set of unified global regulations.

This initiative is a central focus for Brazil’s leftist President Luiz Inácio Lula da Silva, who is chairing the G20 this year.

The G20, which includes major economies, the European Union, and the African Union, is meeting in Rio de Janeiro to discuss key issues such as climate transition financing and debt. However, discussions on curbing tax avoidance by billionaires have dominated the two-day meeting.

The outcomes of these discussions will set the stage for the G20 summit scheduled for November 18-19. While President Lula had hoped for a global minimum tax on the wealthy, a more likely outcome is a call for countries to bolster their own tax measures individually, rather than reaching an international consensus.

The United States and Germany have dismissed the need for a global agreement on taxing billionaires, contrasting with the stance of France, Spain, South Africa, Colombia, and the African Union, who support such measures.

Brazil’s Economy Minister, Fernando Haddad, expressed optimism about the initiative, stating that the final “declaration” to be issued on Friday will represent an important “first step”. The communiqué will address the “Brazilian proposal to examine international taxation not only for companies but also for individuals known as the super-rich.”

A draft of the declaration, seen by AFP, suggests that G20 members will “seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed.” The draft highlights the need for “fair and progressive tax policies” but stops short of endorsing specific international tax agreements.

French economist Gabriel Zucman, who has written extensively on taxing the rich, welcomed the emerging consensus among G20 countries on the need to reform how the ultra-wealthy are taxed. Nobel laureate Joseph Stiglitz urged global leaders to establish minimum standards by November.

Camila Jardim from Greenpeace Brazil criticised the expectation that regular taxpayers should bear the cost of the climate crisis while the super-rich evade taxes, calling for a more equitable approach.

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