The Group of 20 major economies will pledge to accelerate their efforts to more effectively collect taxes from multinational digital companies like Google and Facebook, according to a draft of a joint statement by their finance chiefs.
The G20 finance ministers and central bank governors is also set to warn that the world economy continues to face risks from trade conflicts between leading economies, and will call for accommodative monetary policy to ensure the economy recovers.
“We will continue our cooperation for a globally fair, sustainable, and modern international tax system, and welcome international cooperation to advance pro-growth tax policies,” reads the draft communique, obtained by Kyodo News ahead of a G20 meeting on Saturday and Sunday in Fukuoka.
The meeting, which precedes the G20 summit on June 28 and 29 in Osaka, will take place amid claims that digital giants, also including Apple and Amazon, are not paying their fair share of taxes.
The finance chiefs will discuss how to create global tax rules based more on where those companies make their sales than where their offices are located.
Referring to recent proposals by the Organization for Economic Co-operation and Development on taxation rules in the digital era, the statement says, “We welcome the recent progress on addressing the tax challenges arising from digitalization and endorse the ambitious work program,” adding, “We will redouble our efforts for a consensus-based solution with a final report by 2020.”
As for the world economy, the G20 will say, “Global growth appears to be stabilizing, and is generally projected to pick up moderately later this year and into 2020, while risks remain tilted to the downside.”
“This recovery,” the draft continues, “hinges on accommodative financial conditions continuing, the impact of trade tensions not materially affecting the global economy further,” and other factors. “We will continue to monitor risks, take action to mitigate them and respond if they materialize.”
“Fiscal policy should rebuild buffers where needed,” and “monetary policy should ensure that inflation remains on track toward, or stabilizes around targets,” it reads, adding, “Central bank decisions need to remain well communicated.”
The G20 economies also will reiterate their commitment to refrain from competitive currency devaluations aimed at gaining unfair trade advantages, according to the draft, which was presented during a meeting of deputy finance chiefs that began Thursday.
The nations will also keep their pledge to address global current account imbalances amid growing concern about trade battles between the United States and its partners, including China, Japan and the European Union.
While President Donald Trump remains focused on reducing U.S. goods trade deficits, the G20 will stress the need for “monitoring all components of the current account, including service trade and income imbalances,” said the draft.
Among other issues to be discussed are problems with financing for infrastructure projects in developing countries.
The G20 will express concern “about the debt vulnerabilities and a lack of debt transparency in many low-income countries,” the draft says, apparently referring to some nations struggling to manage debt for Chinese-built infrastructure such as railways under Beijing’s “One Belt, One Road” initiative.
The finance chiefs will also step up efforts against the use of virtual assets to launder money or fund terrorist groups. They are expected to agree to enhance regulations on operators of cryptocurrency exchanges, including requiring them to be registered with governments.
The G20 comprises Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.