G20: World leaders agree on historic corporate tax agreement
The leaders of 20 major world economies have approved a global agreement under which the profits of large companies will be taxed at least 15%.
This raises concerns that multinational companies are redirecting their profits through low-tax jurisdictions.
The pact was approved by all leaders who attended the G20 summit in Rome.
Climate change and Covid are also on the agenda of the summit, which brings together most leaders face to face since the beginning of the pandemic.
The G20 – made up of 19 countries and the European Union – is missing two leaders, and they have chosen to speak via video link from China’s Jin Jinping and Russia’s Vladimir Putin.
According to the Reuters news agency, the tax agreement proposed by the USA is expected to be officially adopted on Sunday and will be enforced by 2023.
US Treasury Secretary Janet Yellen said the historic agreement was a “critical moment” for the global economy and would “put an end to the devastating race to the bottom in corporate taxation.”
She wrote on Twitter that US companies and workers will benefit from the agreement, although many US-based mega-companies will have to pay higher taxes.
The G20 summit comes ahead of the expected COP26 summit on climate change in Glasgow, which starts on Monday. What happens at the G20 may set the tone for COP26, with sharp differences between countries in terms of their commitments to combat climate change.
Italian Prime Minister Mario Draghi opened the two-day summit with a message of unification, telling world leaders that “it is simply not possible to kill ourselves. We must do everything in our power to overcome our differences.”
Unless urgent action is taken to reduce carbon emissions, experts are receiving increasingly threatening warnings for the future.
In an interview with the BBC, British Prime Minister Boris Johnson described climate change as “the greatest threat to humanity” and said that it posed “a risk to a civilization that is essentially coming back”.
However, he acknowledged that neither the G20 nor the COP26 would stop global warming, but could, “if the right measures were taken,” limit the rise in planet’s temperature. “
According to the Reuters news agency, the draft communiqué outlines the G20’s promise to work to limit temperature rises to 1.5 ° C (2.7 ° F), stating that it “will require meaningful and effective action by all countries”.
The proposal also notes the need for “developed countries to mobilize $ 100 billion a year from public and private sources by 2025 to address the needs of developing countries” in order to address climate change – a promise not made by richer countries. since 2009, when it was originally bound.
Report for Iran
Leaders from the United States, Germany, France and the United Kingdom met separately to discuss their “serious and growing concerns” about Iran’s nuclear activities. Iran is not part of the G20 forum.
In a joint statement, the nations said that if Iran continued in its nuclear progress, it would jeopardize the possibility of returning to the 2015 nuclear agreement with the United States and lifting economic sanctions.
They urged Iranian President Ebrahim Raisi to “change course … to avoid a dangerous escalation.”
Former US President Donald Trump withdrew from the agreement in 2018 and renewed harsh sanctions against Iran. Since then, Iran has increased its nuclear activities, violating much of the multinational pact.
Talks with Tehran, which have been suspended for several months, are due to resume in November.
In recent years, many countries have taken care of the number one. They made their own vaccines, built trade barriers, prioritized economic growth over eliminating the climate crisis.
Mario Draghi wants to say it has to stop. The Italian prime minister says that if G20 leaders want to reduce global warming, end vaccination inequalities and address the economic recovery, they must start thinking and acting more multilaterally.
And that doesn’t just mean coming to the top. This means – sometimes – placing broader global interests above narrow national imperatives. This is a big question because it often involves calling on voters. So far, not all world leaders seem ready.
There is still controversy over whether much richer countries are prepared to reduce carbon emissions, provide developing countries with more vaccines against Covid and stabilize volatile energy prices.
The G20 summit will bring a lot of words. However, what will matter is its actions, especially in the area of climate change, as these will play a major role in determining whether the COP26 summit in Glasgow will be successful or unsuccessful.