Following the meeting of the G20 finance ministers and central bank governors on 9 and 10 July 2021 a communiqué was issued summarising the issues discussed.
The communiqué noted that the global outlook has further improved since the previous meeting in April 2021, with the roll out of vaccines and the continuation of support measures by governments. There are however large divergences across countries and the downside risks include the spread of new variants of the virus. All available policy tools will be employed to mitigate the adverse consequences of the pandemic on the groups most impacted including women, youth and low-skilled workers.
International cooperation will continue to aim for sustainable, balanced and inclusive economic growth. Open and rules-based trade is important to promote growth and employment, and the finance ministers are committed to combating protectionism and encouraging efforts to reform the World Trade Organization (WTO).
Environmental measures
Environmental protection is a priority, and the finance ministers are waiting for further analysis by international organisations on the impact of recovery packages on the environment, and on employment and economic growth. Closer international coordination on climate action can promote discussion on the appropriate policy mix for the transition to low- greenhouse gas emission and a more sustainable and inclusive economy. This should involve a wide set of policy instruments such as investment in sustainable infrastructure and innovative technologies; and the design of mechanisms to support clean energy sources and phase out inefficient fossil fuel subsidies. The use of carbon pricing mechanisms and incentives should be encouraged where appropriate, combined with support for the lowest income and most vulnerable groups in society.
Taxation of the Digital Economy
The meeting noted the international agreement on a fairer international tax architecture and endorsed the two-pillar approach to the reallocation of profits of multinational enterprises and the global minimum tax. The finance ministers encouraged the Inclusive Framework on BEPS to agree the remaining issues on Pillars One and Two and to finalise the design elements of the agreed tax framework. The meeting noted that a detailed plan for the implementation of the two pillars should be finalised for the next meeting in October 2021.
The finance ministers also invited all members of the Inclusive Framework on BEPS to sign up to the international agreement. They welcomed the consultation with developing countries to assess the results of their participation in the Inclusive Framework and await a report for October 2021.
Financial Action Task Force
The meeting expressed its support for the Financial Action Task Force (FATF) and for the FATF-style Regional Bodies (FSRBs). Additional contributions are to be made to strengthen the FSRBs and their frameworks for Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT). The meeting also expressed support for the FATF’s continuing work on money laundering risks resulting from environmental crimes, noting the links between the climate and biodiversity threats and other serious crimes. The finance ministers are committed to implementing the AML/CFT global standards on beneficial ownership transparency and regulation of virtual assets. They also expressed support for the FATF’s project to revise the recommendations on beneficial ownership transparency.
