At their meeting in Rome on Saturday, the heads of government from among the 20 leading industrialized and emerging countries gave the green light for the recently negotiated global corporate tax reform, according to participants.
The “historic agreement” on minimum taxation for large companies will end the harmful global race for the lowest corporate tax rates, US Treasury Secretary Janet Yellen said on Saturday. This will end the “harmful race to the bottom in corporate taxation”. Germany’s Chancellor Angela Merkel called the agreement in the evening “a clear signal of justice in the age of digitization”. US President Joe Biden also praised the agreement.
As part of the Organization for Economic Cooperation and Development (OECD), 136 countries, including Austria, had already approved the planned reform at ministerial level. The main aim of the reform is to prevent corporate profits from shifting to tax havens. Large, internationally active companies should therefore pay at least 15 percent tax regardless of their headquarters by 2023 at the latest. If a company with its subsidiary pays less taxes abroad, the home country can collect the difference. In addition, profitable, globally operating digital companies such as Amazon and Google should no longer be taxed only in their mother country, but also where they do good business.
At their summit in Rome on Saturday, several G20 heads of government emphasized the importance of corona vaccinations being accelerated in developing countries. The head of the World Health Organization (WHO) Tedros Adhanom Ghebreyesus made the politicians responsible. “How many more people will die in this and future pandemics?” Asked Tedros on Saturday during a discussion on health issues with the G20 in Rome. “The answer is in your hands.” The outgoing German Chancellor Merkel promised further German donations of 75 million vaccine doses for 2022. Canada will provide at least 200 million doses by the end of 2022 as part of the international Covax initiative, promised Prime Minister Justin Trudeau.
Most of the G20 heads of state and government are physically attending the meeting in Rome this time. The presidents of China, Russia and the Japanese prime minister are only there virtually. In particular, the statements on climate policy in the summit declaration are eagerly awaited because the meeting will take place immediately before the world climate conference in Glasgow. Further national voluntary commitments are expected there in order to achieve the goal of limiting global warming to 1.5 degrees by drastically reducing greenhouse gas emissions.
“We remain committed to the goal of the Paris Agreement (2015) to keep the rise in the global average temperature well below two degrees and to continue efforts to limit it to 1.5 degrees above the pre-industrial level,” the draft now says Summit final declaration.
Originally intended targets and commitments have been deleted from the latest draft of the final communiqué. So there was no longer even an agreement on “immediate action”, as it had been called in an earlier draft. Now there is talk of “meaningful and effective action” in order to slow down dangerous global warming to 1.5 degrees, as is the aim of the Paris Climate Agreement.
There has also been no progress towards the goal of CO2 neutrality. The target date originally set for 2050 is now more generally referred to as “mid-century”. Obviously, this was also done out of consideration for China. The largest producer of carbon dioxide had previously only committed to it until 2060. The most recent draft also lacks an initial formulation to aim for a “largely carbon dioxide-free power supply” in the 2030s. Rather, there is only talk of expanding clean energies. The final declaration should be adopted on Sunday.
In contrast to the efforts in the area of climate change, there are efforts to stimulate the global economy. US President Biden will urge major G20 energy producers with spare capacity, particularly Russia and Saudi Arabia, to increase their production to ensure a stronger global economic recovery, a senior US government official said. This means that more fossil fuels are used. Merkel, in turn, emphasized the importance of special drawing rights amounting to 650 billion dollars at the International Monetary Fund (IMF), which African states in particular could use to boost their economies after the corona pandemic.
There are differences between the G20 countries in other areas. While the G20 states want to commit to free world trade in their final declaration in Rome, a dispute over subsidies for e-cars is boiling up in Washington. States with a strong auto industry such as Japan, Mexico, Canada, Germany, France, Italy and other EU countries are warning the US Congress of a new protectionism to promote US car companies in e-mobility. In a joint letter available to Reuters, there is a warning against buying incentives that are intended to unilaterally benefit US companies.
Italy’s Prime Minister and G20 host Mario Draghi called on the G20 partners to do more to spread the corona vaccine. While 70 percent of adults in industrialized countries are vaccinated, in some developing countries this is only three percent. Merkel pointed out that the vaccine company Biontech had just signed contracts to set up factories with Senegal and Rwanda.
Russian President Vladimir Putin called on Saturday in his virtual statement at the G20 summit that states should mutually recognize their corona vaccines. The background to this is the lack of approval for the Russian vaccine Sputnik, for example in the EU.
