US Treasury Secretary Janet Yellen is more pessimistic than German Treasury Secretary Olaf Scholz about the planned global tax reform. Yellen said on Sunday at the end of the G20 meeting in Venice that the first pillar of the reform might not be ready before spring 2022. The point is that the 100 largest and most profitable corporations in the world should pay more taxes in countries with large markets, from which emerging countries in particular would benefit.
According to experts, however, the technical implementation here is more difficult than with the second pillar, the planned minimum tax for large companies of at least 15 percent. Yellen said the second pillar is on a slightly faster roadway.
132 countries have agreed on a tax reform under the umbrella of the industrialized nations organization OECD, which is supposed to adapt the international rules to the digital age. Seven countries - including Ireland, Hungary and Estonia from Europe - recently refused to sign. The 20 leading industrialized and emerging countries (G20) approved the plans on Saturday. The OECD should clarify the final details by October and present a plan for implementation. The new rules, from which Scholz hopes to generate billions in additional income for the state coffers that are empty due to the corona pandemic, are to be put into law in 2022 and then take effect from 2023. Scholz is one of the strongest supporters of the project. The SPD candidate for chancellor had said at the weekend that he firmly expected a final agreement in October.
Doubts whether reform will succeed
But there are still doubts as to whether the implementation will succeed - above all the question of whether Yellen will get the reform through Congress, in which the Republicans oppose any form of tax hike. In addition, the ideas continue to diverge. For example, France's Finance Minister Bruno Le Maire brought a minimum tax of 20 percent into play at the G25 meeting, which experts consider to be unrealistic.
With a global agreement, the USA hope to be able to prevent a patchwork of national digital taxes and similar levies. In this context, the USA is bothered by a digital levy planned by the EU Commission, which is to be presented at the end of July. According to insiders, there was massive pressure from the USA, but also from European countries, at the G20 meeting to at least postpone the plans so as not to jeopardize the much more far-reaching global agreement. EU Economic Commissioner Paolo Gentiloni said after the consultations in Venice that a global solution was a priority. Yellen will meet EU Commission President Ursula von der Leyen on Monday. Here, too, she is likely to press to withdraw the levy.
Yellen also said global tax reform will provide countries with much-needed revenue to invest. She expressed concerns about the delta variant of the corona virus. The G20 states would have to give each other more support than before when it comes to distributing the vaccines. However, no new commitments were made at the meeting, not even for poorer countries. Yellen added that preparations for further pandemics must also be made now. There should be resolutions on this in October.
The US is hoping for more financial support for particularly poor countries by October when the G20 countries meet next. They are to be allocated 100 billion dollars (84,6 billion euros) from the additional funds of the International Monetary Fund. In order to better fight the pandemic and its consequences, the reserves of the IMF are to be increased by 650 billion dollars by the end of August. That would be the largest increase in so-called special drawing rights - an artificial currency of the IMF - in the history of the fund. At least $ 100 billion of the new funds will go to the world's poorest countries on a voluntary basis. How exactly this will happen and who will participate in the process from the IMF members is still completely open. According to insiders, Germany wants to help in other ways, and the special drawing rights are to remain with the Bundesbank. (apa)