VENICE: The global economic recovery is being threatened by an increase in novel coronavirus variations and limited vaccination access in underdeveloped countries, according to the finance ministers of the world’s 20 major economies who met on Saturday (Jul 10). The G20 summit in Venice, Italy, was the first face-to-face meeting of the ministers since the outbreak began. The approval of new laws aimed at preventing multinational corporations from moving earnings to low-tax havens is one of the decisions made.
This clears the way for G20 leaders to agree on a new global minimum corporation tax rate of 15% at their October summit in Rome, a move that might help public treasuries recover hundreds of billions of euros squandered by the COVID-19 debacle.
READ: The G20 agrees on a major global tax overhaul
The global economic outlook has brightened since the G20 talks in April, thanks to the launch of vaccines and economic support packages, but it remained fragile in the face of varieties like the fast-spreading Delta, according to a final communique.
“The recovery is marked by significant differences across and within countries, and it remains vulnerable to negative risks, including the spread of novel COVID-19 virus strains and differing vaccination rates,” the report stated.
While G20 countries pledged to utilize all policy measures at their disposal to combat COVID-19, the meeting’s Italian hosts noted there was also agreement not to impose new limitations on people.
“We all believe that we should avoid imposing any new restrictions on citizen movement and people’s way of life,” said Italian Economy Minister Daniele Franco, whose nation is now holding the rotating G20 presidency until December.
While the communique emphasized support for “equitable global sharing” of vaccines, it did not propose specific measures, instead acknowledging the International Monetary Fund, World Bank, World Health Organization, and World Trade Organization’s recommendation for US$50 billion in new vaccine financing.
The world’s rich and poor continue to have vastly different vaccination rates. The disparity, according to WHO Director-General Tedros Adhanom Ghebreyesus, is a “moral outrage” that jeopardizes wider efforts to control the virus’ spread.
While some of the world’s wealthiest countries have given almost two-thirds of their citizens at least one vaccine, many African countries’ vaccination rates are significantly below 5%.
READ: The COVID-19 Delta version stalls the return to normalcy
Brandon Locke of the ONE Campaign, a public health non-profit, condemned the G20’s inactivity, calling it “a lose-lose situation for everyone.”
“Not only will it cost lives in poorer nations, but it will also increase the possibility of new varieties wreaking havoc in wealthier countries,” he warned.
Prior to a Rome conference in October, Italy indicated the G20 will revisit the problem of vaccination funding for impoverished nations, and that new varieties would be a topic to consider. It did not provide any other information. “To ensure that everyone on the earth has access to vaccines, we must agree on a process. The IMF estimates that if we don’t, the world economy will lose $9 trillion “According to the Jubilee USA Network, a religious development organization. It was referring to an estimate by the International Monetary Fund (IMF) that international cooperation on COVID-19 vaccinations might hasten global economic recovery and add $9 trillion to global income by 2025.TAX HOLDOUTSA According to a Reuters tally of new COVID-19 infections, the number is increasing in 69 countries, with the daily rate increasing since late June and now standing at 478,000. Kristalina Georgieva, managing director of the International Monetary Fund, said the globe was experiencing “a worsening two-track recovery,” owing in part to disparities in vaccination availability. The most significant policy achievement of the talks was a well-publicized agreement on the worldwide corporate tax rate, which brought an end to eight years of bickering on the subject. The goal of establishing a 15% floor is to prevent multinational corporations from shopping around for the lowest tax rate. It would also change how firms like Amazon and Google are taxed, based in part on where they sell goods and services rather than where their headquarters are located. READ MORE: What Does the G7’s Global Tax Reform Plan Mean for Singapore? Commentary: The global minimum tax reflects the interests of wealthy countries, but it may not provide revenue for others. US Any countries hostile to it, according to Treasury Secretary Janet Yellen, would be encouraged to join up by October. “We’ll attempt to accomplish that,” she said, adding that “it’s not necessary for every country to be on board.” The agreement also contained provisions to prevent the use of tax havens anywhere. G20 members, which include major players such as the United States, Japan, the United Kingdom, France, Germany, and India, account for more than 80% of global GDP, 75% of global commerce, and 60% of the world’s population. Kenya, Nigeria, Sri Lanka, Barbados, and St Vincent & Grenadines are among the countries that have not signed on, in addition to European Union holdouts Ireland, Estonia, and Hungary. According to EU Economy Commissioner Paolo Gentiloni, there is still debate regarding how much of a company’s revenues should be taxed at the national level, as well as whether other industries other than financial services and mining should be exempt. A debate in the US Congress over President Joe Biden’s proposed tax increases on corporations and rich Americans, as well as a separate EU plan for a digital charge on IT giants, could cause complications. Officials from the G20 urged the International Monetary Fund to “immediately offer practical solutions” for affluent countries to transfer a portion of a US$650 billion IMF currency reserve issuance to poorer countries. They did not endorse the IMF’s US$100 billion aim for transferring Special Drawing Rights to developing countries, but they did ask for contributions from all nations that are able to meet the “ambitious target.” ADD THIS TO YOUR BOOKMARKS: Our in-depth coverage of the COVID-19 pandemic and its progression For the most up-to-date information on the coronavirus outbreak, download our app or follow us on Telegram: https://cna.asia/telegram/n
