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G20 leaders have expressed a unified intention to work together on concerns surrounding the proposed global minimum tax and the wider tax issues linked to the digitalisation of economies. They reiterated the need to maintain each country's tax sovereignty while seeking a practical and balanced solution. The discussions also highlighted the demand for a new OECD framework to improve transparency in immovable property taxation on a voluntary basis. With the US distancing itself from the global tax deal earlier this year, several countries are reassessing their position, adding weight to the G20's call for clarity and stability in international tax rules.
G20 leaders have stated their commitment to working together on concerns related to the global minimum tax and the widening tax challenges created by the digitalisation of the global economy. Their joint declaration, released after the Summit in South Africa, emphasised that any progress on this subject must also protect the tax sovereignty of all countries. This approach reflects ongoing discussions across developing and developed economies about how to balance global coordination with national interests. Advertisement
The declaration noted that the group aims to pursue a balanced and practical solution on the 15 per cent global minimum tax under the OECD's Pillar Two initiative. This framework was introduced to ensure that multinational companies pay at least a minimum rate of tax, regardless of where they operate. The leaders acknowledged existing concerns, particularly due to the possibility of conflicts between the rules proposed under Pillar Two and certain US domestic tax laws. Earlier this year, the US administration issued a Presidential memorandum stating that the global tax deal would have no effect within the United States, prompting several countries to reassess the overall benefit of joining the agreement.
The G20 also underlined the need for a stable global tax environment that supports a level playing field. They mentioned that any final solution must address potential risks and should support continued discussions on the tax challenges arising from the digitalisation of economies. These efforts are expected to move forward in coordination with the OECD/G20 Inclusive Framework, which brings together a large number of jurisdictions working on improving international tax rules.
Leaders further highlighted that the OECD/G20 BEPS project may introduce a new voluntary framework to strengthen transparency in the taxation of immovable property. This addition is intended to assist countries in curbing tax base erosion and improving cooperation, especially in cross-border property holdings.
The declaration also reiterated that mobilising domestic resources remains the most reliable form of funding for national development. The leaders emphasised that tax reforms should be structured, nationally led, and aligned with each country's priorities while maintaining trust with taxpayers.
Source PTI
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