Brazil urges G20 to enforce global tax on super-rich in battle against tax evasion

At the G20 meeting on Thursday, Brazil’s finance minister, Fernando Haddad, proposed the implementation of a global tax on the super-rich to combat the rampant issue of tax evasion, the AP news reported.

Advocating for international cooperation, Haddad highlighted the need for a collective effort to ensure that the wealthiest individuals contribute to societal and environmental sustainability.

Haddad asserted that Brazil, currently presiding over the G20, is striving for a declaration on international taxation by July.

However, he acknowledged the inevitable debates, citing the differing perspectives within the G20 member nations on this issue.

President Luiz Inácio Lula da Silva has placed concerns of the developing world, such as inequality reduction and multilateral institution reform, at the forefront of Brazil’s agenda.

According to a 2023 study by the Tax Justice Network, countries globally face a potential loss of up to $4.8 trillion in tax revenue over the next decade due to tax havens.

Haddad referred to a report from the EU Tax Observatory, revealing that billionaires worldwide have effective tax rates as low as 0 per cent to 0.5 per cent of their wealth.

Recent revelations like the Panama Papers Leak and Paradise Papers have highlighted the widespread nature of tax evasion and avoidance in business practices.

The gap between the super-rich and the majority of the global population has intensified since the COVID-19 pandemic, warns anti-poverty organisation Oxfam International.

André Vereta-Nahoum, a sociology professor at the University of Sao Paulo, pointed out that global movements have favoured reducing taxation on companies and wealth, resulting in fewer taxes on assets today compared to decades ago.

Notably, US President Joe Biden has joined the chorus, advocating for a billionaire minimum income tax.

However, the likelihood of Congress passing this proposal remains uncertain.

In a demonstration of increasing global consensus, the United Nations General Assembly passed a resolution last year, endorsing stronger international tax cooperation to enhance inclusivity and effectiveness.

Economists, including Carla Beni from the Getulio Vargas Foundation, recognise the challenge of achieving a common document despite the abundance of data supporting the need for action.

As calls for higher taxes on the wealthy grow louder worldwide, the debate on addressing tax evasion and wealth inequalities continues to gain momentum.