G20 endorses global minimum taxes and vaccines for poor countries

All G20 leaders – including Brazil – supported the creation of a global minimum tax during the first summit meeting on Saturday (30) in Rome, Italy.

The global minimum tax is intended to make it more difficult for large companies to hide their profits in tax havens, which offer lower taxes, and may be in effect from 2023. The agreement should be finalized and announced on Sunday (31).

Discussions about a 15% tax on corporate profits began four years ago, and gained momentum after the election of US President Joe Biden.

Earlier on Twitter, Biden said the deal was “more than a tax deal” but “diplomatic that is reshaping our global economy and helping our people.”

The taxation agreement will cover 90% of global GDP, including all OECD and G20 countries.

The 15% rate will be valid for companies with revenues over 750 million euros (about 5 billion R$), and it is estimated that the total is up to 150 billion US dollars (about 845 billion R$) annually.

Health and the economy on the agenda

Italy, which is hosting the meeting in Rome, put health and the economy high on the agenda on the first day of the meeting, while the more sensitive negotiations on climate change were left on Sunday (31).

Opening the meeting, Italian Prime Minister Mario Draghi said governments need to work together to tackle the daunting, overwhelming challenges facing their people.

“From the pandemic to climate change to fair and equitable taxation, going it alone is simply not an option,” Draghi said.

Brazilian President Jair Bolsonaro (non-partisan) also elected health and the economy as one of the highlights of his speech at the G-20 summit.

Bolsonaro highlighted the progress of vaccination in Brazil, the distribution of emergency aid and the recovery of the economy.

“Brazil has committed to a comprehensive and effective vaccination programme, in parallel with the agenda of emergency aid and job preservation to protect the most vulnerable,” Bolsonaro told the international audience.

The G-20 meeting was personal again. In 2020, at the height of the pandemic, the meeting was virtual.

In the traditional image of heads of state, the event was invented. Doctors in white and Red Cross staff members have joined world leaders in honoring the sacrifices and efforts of doctors around the world during the pandemic.

More vaccinations for the poor

G20 countries also agreed on Saturday to provide more Covid-19 vaccines to the poorest countries to reach the goal of vaccinating 70% of the world’s population by mid-2022.

President Xi Jinping said China has praised the supply of more than 1.6 billion doses of Covid-19 vaccines to more than 100 countries and international organizations. It promised to provide more than two billion doses in co-production with 16 countries.

Russian President Vladimir Putin has called on G20 countries to speed up recognition of Covid-19 vaccines. He also called on the World Health Organization (WHO) to be more flexible in making decisions about approval of vaccines.

Russia has been quick to develop and launch a Covid vaccine, Sputnik V, but other countries’ acceptance and approval of this vaccine has been slow.

Before the summit began, protesters and climate activists were protesting peacefully to urge G20 leaders to take action against climate change, an issue expected to dominate the second and final day of the meeting on Sunday.

There is a strong police presence in the area. Italian authorities beefed up security and escalated police reinforcements during the summit as a precaution.

G20 members

Created in 1999, the G-20 brings together the 19 largest economies in the world and the European Union. Annual summits have been held since 2008 in the presence of heads of state or government.

The group includes: South Africa, Germany, Saudi Arabia, Argentina, Australia, Brazil, Canada, China, South Korea, the United States, France, India, Indonesia, Italy, Japan, Mexico, the United Kingdom, Russia, Turkey and the European Union.

These countries represent about 60% of the world’s population, 80% of the global GDP and are responsible for 75% of trade worldwide.

(Information by Chris Liakos, Kara Fox, Ben Weidman, Leandro Magalhaes, Calwan Bernardo of CNN and Crisbyan Palmer and Andrea Shalal of Reuters)