G20 draws consensus on tackling taxation of super-rich, forum undecided on issue

Taxing the super rich: The maiden joint declaration by G20 finance leaders that vowed to cooperate on effectively taxing the world's richest on Friday deliberated over a deeper disagreement about the right forum to advance the agenda.

The finance ministers and heads of central banks from the Group of 20 major economies showed agreement over reference regarding fair taxation of ultra-high-net-worth individuals. This was expressed in both their joint communique and a separate declaration on international tax cooperation on Friday.

"We plan to commit to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed," stated the final draft of the G20 ministerial declaration in Rio de Janeiro, as accessed by Reuters. 

However, a difference of views has already emerged about whether to take this step in talks at the United Nations or via the Organization for Economic Cooperation and Development (OECD), a group of richer democracies founded by US and European allies.

Speaking with Reuters on the sidelines of the G20 meeting, US Treasury Secretary Janet Yellen said that she believes the OECD, which steered negotiations for a global two-part corporate tax deal for the past three years, is better placed to handle such talks. "We do not want to see this shifted to the UN," Yellen said, adding that the OECD "is a consensus-based organisation. 

“We have made a huge amount of progress, and the UN doesn't have the technical expertise to do this," Yellen added. 

G20 Presidency 

Some of the leading developing nations have already shown resentment at that approach, according to an official privy to the matter, who said Brazil should use its G20 presidency to advance discussion at both the UN and OECD. Some of the members advocating for a global minimum tax on billionaires, including Nobel laureate Joseph Stiglitz, insisted that the UN was the proper forum for global tax cooperation.

Oxfam International's Tax Policy Lead, Susana Ruiz, has called on G20 leaders to align with the progress being made at the United Nations and to establish a democratic process for setting global standards on taxing the ultra-rich.

"We call on G20 leaders to be in sync with the progress being made at the UN and establish a truly democratic process for setting global standards on taxing the ultra-rich," Ruiz stated.

Ruiz criticised the idea of delegating this task to the Organization for Economic Cooperation and Development (OECD), describing it as a "club of mostly rich countries" and stating that such a move "would simply not be good enough."

(With Reuters inputs)