By Lawrence Matheson
Brazil's finance minister tabled a suggestion to tax the super-rich globally at a G20 meeting in Sao Paulo in an attempt to combat widespread tax evasion.
Speaking at the gathering, Fernando Haddad asserted that international collaboration could put an end to tax dodging and ensure that "these few individuals make their contribution to our societies and to the planet's sustainable development." Haddad is hoping for an agreement on international taxation from G20 member countries by July, although he acknowledged at a press conference after the meeting that the road ahead may not be straightforward.
"There will be a lot of debate about this, which is absolutely natural, especially because not every country feels the same way about this problem that was brought to the G20 by Brazil," he commented. Currently, Brazil has its turn as the chair of the group made up of leading affluent and developing countries.
President Luiz Inacio Lula da Silva has prioritised topics like decreasing inequalities and reforming multinational institutions. "Brazil has a role to play, a legitimacy to use on the issues that need to be addressed and that are not always represented in the G20," Haddad stated, highlighting concerns related to the environment, society, and fiscal matters.
A 2023 study by the Tax Justice Network suggested that countries worldwide could lose up to $4. 8 trillion (£3.8 trillion) in tax revenue over the next decade due to tax havens. The EU Tax Observatory also reported that billionaires across the globe are only paying a tiny fraction (0% and 0. 5% ) of their wealth as taxes.
The Panama Papers Leak and Paradise Papers scandals shed light on how businesses have overlooked taxes. Oxfam International revealed that the gap between the super-rich and everyone else has grown dramatically since the COVID-19 pandemic started. "There are fewer taxes on assets today than two or three decades ago. The global movement has tended towards reducing taxation on companies and wealth," shared Andre Vereta-Nahoum, a sociology professor from the University of Sao Paulo.
However, as inequality grows, many people, including U. S. President Joe Biden, are starting to call for higher taxes on the wealthy. But the chance of Congress passing this proposal is quite small. In a hopeful sign, the United Nations General Assembly passed a resolution last year to enhance international tax cooperation to "make it fully inclusive and more effective."
"The difficulty is no longer putting the issue on the table, the data is there. The difficulty is arriving at a common document," said Carla Beni, an economist from the Getulio Vargas Foundation, a university and think tank.
