For the first time, the G-20 countries have put the spotlight on the super-rich and have committed to closing the tax evasion gap for the super-rich in a joint declaration signed Thursday in Rio de Janeiro. “At the end of the meeting, the declaration that we will release tomorrow (Friday) was applauded, and it covers several issues, including the Brazilian proposal to start thinking about international taxation not only for companies, but also for ultra-rich individuals,” said the Finance Minister of Brazil —which holds the presidency of the G-20—, Fernando Haddad, in the press conference after the meeting with his counterparts.
This declaration is a milestone and could become a turning point in the international tax debate. The G-20 opened the issue of taxation of the super-rich in February of this year and never before in an institutional venue of this calibre had a consensus been reached on this matter. While waiting for the final document to be published, sources familiar with the negotiations explain that the text emphasises, rather than the creation of a global tax on the wealthiest, the improvement of international tax cooperation and the tools to tackle tax evasion and avoidance by this group, which is usually characterised by high international mobility.
📢 Today, Brazil’s Finance Minister Fernando Haddad announced a historic consensus at the G20 on international taxation, including the taxation of large fortunes. 💼💰 The agreement was reached during the 3rd meeting of G20 Finance Ministers. pic.twitter.com/xVukoXXUrF
— G20 Brazil (@g20org) July 25, 2024
The statement comes after the Brazilian presidency of the G-20 commissioned French economist Gabriel Zucman, one of the leading experts on tax evasion, to write a report on how to tax the richest individuals more heavily. The study concludes that if the 3,000 or so richest people in the world, with assets of more than $1 billion, were to pay 2% of their wealth in taxes each year, governments would have between $200 and $250 billion more on a global scale.
Zucman’s proposal does not propose the design of a tax ad hoc on wealth, such as the Spanish tax on assets, but rather a standard that guarantees minimum taxation on the fortunes of the richest, with an approach that is partly inspired by the global agreement reached within the Organisation for Economic Co-operation and Development (OECD) and the G-20 for large multinationals to pay more taxes.
“For the first time in history, there is now a consensus among G20 countries that the way we tax the super-rich must be fixed, and a commitment to work together to achieve this. This is an important step in the right direction,” the economist said in a statement released by the EU Fiscal Observatory, of which he is director, at the conclusion of the meeting of the bloc’s finance ministers.
“This is an important global step forward: for the first time in history, the world’s largest economies have agreed to cooperate to tax the ultra-rich,” added Susana Ruiz, Head of Tax Policy at Oxfam International. A couple of weeks ago, the NGO coordinated, together with the Club of Madrid, the publication of a letter signed by twenty former heads of state and government from different countries – including Felipe González and José Luis Rodríguez Zapatero – in which they asked the US and the rest of the G-20 leaders to raise taxes on the super-rich. “At the G-20 summit in November this year, leaders must go beyond their finance ministers and support a concrete coordination: agree on a new global standard to tax the ultra-rich,” Ruiz urged.
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