Finance ministers from the Group of Seven rich nations said that they had to make more headway on the small print of a reform of global corporate tax rules. This should be finished earlier for a summit of world leaders in October. Britain’s Rishi Sunak said that he urged his G7 peers in a virtual meeting, for making continued technical progress on the reforms. The U.S. Treasury Secretary Janet Yellen underscored the need of implement the new rules.
In this summer, more than 130 countries agreed to work out new rules, regarding where companies are taxed, to adopt a tax rate of at least 15%. Dropping the national digital services taxes in favor of the new taxing rights also comes under this. In October the next group of 20 summit will take place. And the diplomats are pushing for a deal for that on the technical parameters for the reform. Japanese Finance Minister Taro Aso said that the G7 must unite to play a leadership role to aim for an effective agreement.
134 countries agreed on that agreement, according to Yelln. That represents more than 90% of the world’s GDP. The new international tax system would help government to invest in their workers and economies, this is while levelling the playing field on which U.S. companies compete. Sunak tweeted that he also called on the G7 to give support for vulnerable countries through the International Monetary Fund’s Special Drawing Rights (SDRs). The Treasury said that Yellen also called for continued G7 efforts for enhancing support for low-income countries that were hit hard by the pandemic. Yellen urged major economies to lend their SDRs. This is to support vulnerable countries. IMF chief Kristalina Georgieva, thanked Sunak and Britain by his tweet, for what she called remarkable progress on ways to amplify the benefits of the new Special Drawing Rights allocation for countries in need during the G7 meeting.
G7 members supports for both the IMF’s existing Poverty Reduction and Growth Trust and a new vehicle proposed by Georgieva, the Resilience and Sustainability Trust. A G7 source said that the meeting also addressed how to deal with the new Taliban government in Afghanistan. They don’t want to see a humanitarian catastrophe in Afghanistan. And there must not be a famine over there. Britain holds the rotating presidency of the G7. This comprises of Canada, France, Germany, Italy, Japan and the United States. Germany will be the next year’s G7 presidency.