Finance Minister Haddad expects G20 deal by Nov. to tax super‑rich

The G20—a group that brings together the 20 largest economies on the planet plus the European Union and the African Union—could reach an agreement on taxing the super-rich by November, Finance Minister Fernando Haddad said Wednesday (Apr. 17). On a trip to the US, the minister said that President Joe Biden’s government backs the measure, proposed by Brazil, which holds the G20 presidency until November this year.

“In July, and then in November, we can release a political communiqué with the consent of the G20 members saying yes, this proposal should be examined, it’s well-founded, and it’s worth poring over it for the next three or four years to understand what we’re talking about,” he said at a press conference alongside his French counterpart Bruno Le Maire.

Despite the apparent consensus, the Brazilian finance minister said the G20 countries should treat the issue as a priority in the coming years. He advocated a joint international effort, as taxation by just one nation would be ineffective and could lead to conflicts of interest. “If any country thinks it’s going to solve this kind of injustice on its own, it will be harmed by a kind of fiscal war between national states,” he warned.

Regarding the engagement of other countries, Minister Haddad cited the administration of President Joe Biden as a potential ally: “The Biden administration has given clear signals that something needs to be done [in connection with taxing the super-rich], either domestically or internationally.”

Regarding Brazil, he said that political will is required for the proposal to move forward. The joint G20 communiqué, he went on, should have three pillars: the exchange of data between countries, technical support from the Organization for Economic Cooperation and Development (OECD), and a short deadline for implementing the measures, which shows the countries’ commitment to taxation.

French Minister Bruno Le Maire said he agreed with the need to approve the measure. “This is just a question of political will and political determination,” he argued.

Debt

In the morning, Minister Haddad said the world could be on the brink of a new debt crisis, following the costs of the COVID-19 pandemic and the rise in inflation on the planet. At a G20 event to combat poverty and hunger, he said that no country will be able to overcome the problem on its own. Taxing the richest is key to reducing the debt, he stressed.

“Talks on taxation are exploring innovative ways of making the super-rich pay their fair share of taxes, helping expand the additional fiscal space for implementing public policies against hunger and poverty,” he declared.

On Wednesday, the International Monetary Fund (IMF), which is holding its annual spring meeting in Washington, downgraded the growth of Brazil’s public debt. The gross debt, the IMF affirmed, should rise from 84.7 percent in 2023 to 86.7 percent of the GDP this year, compared to a previous 90.3 percent.

Despite the slowdown, the IMF recommended that Brazil make a more “ambitious” fiscal effort and cut more spending or increase revenue. Minister Haddad welcomed the revised projections.

“The fact that the IMF says our debt is stabilizing at a better level than they initially assumed is significant, but the challenge is real. If there’s one person who has never denied that we have a fiscal challenge, it’s yours truly,” he said.

Engagements

Until Friday (19), Minister Haddad is expected to take part in the IMF and World Bank spring meeting as well as promoting a second gathering of G20 finance ministers and central bank heads. On Thursday (18), Haddad should chair the second G20 ministerial meeting at 10am local time, also at the IMF headquarters, and give a press conference at around 1pm.

In the afternoon, he will hold a bilateral meeting with China’s Finance Minister Lan Fo’an. He will then attend a closed meeting organized by the IMF and the G20 on risks to the global economy.