G-20 Excludes Brazil’s Billionaire Tax From Draft Communique

(Bloomberg) -- The world’s leading finance chiefs are set to shelve Brazil’s controversial plan to create a global tax on billionaires, including only a vague mention of the idea in a draft communique from this week’s meeting in Rio de Janeiro.

The draft communique, which was obtained by Bloomberg News, lacks any commitments to continue exploring a 2% minimum tax on the world’s wealthiest individuals, a plan Brazil President Luiz Inacio Lula da Silva placed at the heart of his country’s year as the Group of 20’s leader.

Instead, they said only that they will “continue to work together towards a fairer, more stable and efficient international tax system fit for the 21st century.”

The idea has split the G-20 and the Group of 7 since it was initially unveiled in February, winning support from nations like France and South Africa while the US and others rejected it. Amid those disagreements, the finance ministers entered this week’s gathering in Rio poised to punt the plan into the future by calling for studies on taxation and inequality that could take years, as Bloomberg News reported Wednesday.

The final wording of the communique is subject to ongoing debates. The group is also set to issue a separate statement on international tax policy cooperation, Tatiana Rosito, the secretary for international affairs at Brazil’s finance ministry, told reporters Thursday.

Lula has pushed the levy as a potential way to help pay for global fights against climate change and hunger. The US and other nations, however, have continued to express doubts about its feasibility.

“Tax policy is very difficult to coordinate globally, and we don’t see the need or really think it’s desirable to try to negotiate a global agreement on that,” US Treasury Secretary Janet Yellen told reporters in Rio on Thursday. 

The calls for further studies on how governments can increase transparency and fairness in the taxation of individuals will be included in the separate statement on global cooperation, according to multiple people familiar with the discussions. That task will be carried out by the architects of a global minimum levy on corporations, a G-20 plan that’s made some progress in recent years. 

The draft communique also acknowledges the need for more debt transparency between developing nations and their wealthier creditors.

--With assistance from Christopher Condon.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.