Finance minister Nirmala Sitharaman on Thursday known as on G20 nations to make sure that growing nations don’t face any “unintended consequences” of the proposed world minimal tax deal on the G20 and earn “meaningful revenues”.
She additionally stated that the considerations of growing nations must also be addressed whereas formulating guidelines for the proposed two-pillar tax deal to make sure a fairer and inclusive tax system.
“…it is necessary to guard against any unintended consequences, which may have an adverse impact on developing countries. We shall continue to work for the strengthening of international cooperation for a fairer, transparent, efficient and effective global tax system that supports and empowers the developing countries in their efforts to mobilise resources,” she stated whereas addressing the ‘G20 Ministerial Symposium on Tax and Development’ in Bali.
A complete of 130 nations, together with India, had in July final 12 months agreed to a overhaul of worldwide tax norms to make sure that multinationals pay taxes wherever they function and at a minimal 15 per cent price. The finance ministry had then stated that some important points, together with share of revenue allocation and scope of topic to tax guidelines, are but to be addressed and a ‘consensus agreement’ would occur after understanding the technical particulars of the proposal.
The proposed two-pillar resolution consists of two elements — Pillar One which is about reallocation of further share of revenue to the market jurisdictions and Pillar Two consisting of minimal tax and topic to tax guidelines.
Developing nations make up nearly one-third of the membership of the G20 inclusive framework for taxation.
“There is a need to ensure that the developing countries are able to effectively participate in the negotiations as well. Resource constraints and the limited capacities to participate in the discussions at the inclusive framework need to be addressed to ensure that membership of the developing countries result in their needs and concerns being articulated and heard and that truly is the inclusive framework,” she stated.
Sitharaman known as on the G20 inclusive framework to help the lively participation of all members within the finalisation of the technical facets of the two-pillar resolution.
This, she stated, would guarantee a “fairer, sustainable and inclusive tax system, which results in meaningful revenue” for the growing nations.
“We need to have their (developing nations) inputs and include them particularly because these rules will affect them,” the minister stated.
Both the pillars of the proposed taxation system ought to come into impact concurrently for an equitable resolution, Sitharaman stated, including “there is no way in which they can be implemented separately, because their effectiveness will be lost.”
Source: www.financialexpress.com”