WASHINGTON, United States — The international community must do more to make the world’s richest companies and individuals pay their “fair” share of taxes, Brazil and France’s finance ministers said Wednesday.
Brazil, which is chairing the G20 this year, has been pushing for the group of nations that together account for 80 percent of the world’s economy to adopt a shared stance on preventing tax-dodging by billionaires by the summer.
“Fair international taxation is not just a topic of choice for progressive economists, but a key concern at the very heart of macroeconomic management today,” Brazilian finance minister Fernando Haddad said during an IMF event in Washington.
“Without international cooperation, there is a limit to what states can do, both rich and developing ones,” he added.
Haddad called on countries to “enhance revenue mobilization through fair, transparent, efficient and more progressive tax systems” to make the system “fairer.”
France backs minimum tax
Sitting alongside Haddad at the IMF event, French finance minister Bruno Le Maire renewed his calls for a global minimum tax — and backed calls for a crackdown on tax avoidance.
France is among the world’s advanced economies that have thrown their support behind a 15 percent global minimum tax rate and have already implemented a minimum tax on the world’s tech giants.
READ: Deal to force MNCs to pay at least 15% tax seen marred by loopholes
“The future of the world cannot be a race to the bottom,” Le Maire said. “This is true also of taxation.”
In January this year, the European Union introduced a 15 percent minimum tax for multinational companies active in the 27-member trading bloc.
According to the Organization for Economic Co-operation and Development (OECD), a global minimum tax could bring in an additional $200 billion in revenues per year.
Billionaire tax
Le Maire also called on the world’s richest individuals to pay more in tax, outlining a series of steps to boost transparency and information-sharing between countries to better determine the correct amount of tax that the world’s super-rich should pay.
READ: Tax the rich: slow progress on the international front
“Digital taxation, minimum taxation on corporate tax — now comes the taxation on the wealthiest individuals,” he said.
“Everybody has to pay their fair share of taxation,” he added.
Given that there are about 3,000 US-dollar billionaires globally, a 2 percent wealth tax would generate about $250 billion in additional tax revenue worldwide, according to the French economist Gabriel Zucman.
READ: Brazil’s finance chief proposes global tax on super-rich
“The Democratic popular demand for this form of taxation is overwhelming,” he said during an event at the IMF later on Wednesday.
“It’s feasible and we understand how it can be done very quickly,” he added.
A wealth tax could be a key source of revenue for states to finance the trillions needed for the climate transition, the non-governmental organization (NGO) Global Citizen said in a report published Wednesday.
According to the report, the wealth of the richest people has collectively increased by $2.7 billion a day since 2020, and they emit on average a million times more carbon dioxide than the average person.