G-20 Pledges to Make Progress on Global Tax After US Proposals

Group of 20 finance chiefs pledged to keep working toward a fair international tax system after France and other European countries welcomed U.S. proposals for a minimum levy on corporate profits.

“We remain committed to reaching a global and consensus-based solution” by the middle of this year, G-20 finance ministers and central bank governors said in a statement after a virtual meeting on Wednesday.

Talks to overhaul global tax rules for corporations have accelerated sharply since Joe Biden succeeded Donald Trump as U.S. President. Treasury Secretary Janet Yellen last week laid out plans for a 21% minimum global levy, much higher than the 12.5% level under discussion among nearly 140 countries at the Organization for Economic Cooperation and Development.

Shortly before the meeting, French Finance Minister Bruno Le Maire told Bloomberg TV that his country is open to agreeing to a higher minimum tax. He also said France is weighing long-awaited proposals from the U.S. on how to tax the profits of technology giants.

Both elements are key to negotiations among that had been hobbled by disputes during the Trump presidency. A speedy resolution would reverberate across the world, bolstering incomes for governments trying to rebuild their economies after the pandemic.

The G-20 finance chiefs also endorsed an extension of debt relief for the world’s poorest nations through to the end of the year, and backed an initiative to bolster IMF financial resources by $650 billion to help the world’s most vulnerable economies cope with the fallout from the pandemic.

In addition, they said they “recall our commitment to fight protectionism” -- another sign the U.S. is taking a more cooperative global approach than under the Trump administration.