“Taxation is at the heart of the global macroeconomic issue,” says Brasil’s Minister of Finance

According to Fernando Haddad, taxing the super-rich is one of the ways to ensure sustainable development, but it requires international efforts. Brazilian proposals were welcomed during a panel hosted at the International Monetary Fund (IMF) headquarters in Washington.

This Wednesday (07), in Washington, Brasil’s Minister of Finance, Fernando Haddad, defends that countries must conclude the implementation of Pillars 1 and 2 of the Organization for Economic Co-operation and Development (OECD) — taxation of digital services and minimum taxation of transnational businesses, respectively— and advance toward a third axis: the taxation of the super-rich. 

Haddad participated in a panel at the International Monetary Fund (IMF) headquarters about international taxation. Also at the event were the managing director of the IMF, Kristalina Georgieva; the French minister of Finance, Bruno Le Maire; and the Minister of Finance from Kenya, Njuguna Ndung’u. 

“International taxation is not merely the favorite theme of progressive economists; it is an issue of key concern that is at the heart of the global macroeconomic issue”, Haddad began. 

In the Minister’s point of view, despite the stability of the global economy, new resources are required to ensure robust growth which can bring collective benefits: “Inequality has been increasing, and the Sustainable Development Goals are becoming increasingly distant. During Brasil's Presidency of the G20, I have advocated for a new globalization, based on social and environmental criteria”. 

According to Haddad, taxing the super-rich is one of the ways to ensure sustainable development, but it requires international efforts.

“Each country can go a long way individually. This is exactly what we are doing in Brasil through our Tax Reform. However, without international cooperation, there is a limit for national states to act. Without cooperation, those who are on the top will continue to evade our tax systems,” he declared. 

Haddad's speech was welcomed by other panelists. Minister Le Maire stated that to refrain from combating inequality through international taxation is “unfair and unacceptable”. 

“It is a matter of efficiency and justice. The idea is that each one will pay with their fair share of contribution. Now as for the three pillars, I would like to thank Fernando Haddad for bringing it up as a priority during the Brasil G20 Presidency. Fernando, you can count on France’s absolute support”, he said.

Social and environmental improvements

Georgieva, from the IMF, highlighted the importance of ensuring that economic growth reflects improvements in terms of social and environmental issues.

“Mobilizing a large volume of resources is possible. In most countries, the rich pay fewer taxes than the middle class and even the poor. Our first choose is to close the loopholes and prevent tax evasion. We call on the international community to implement agreements that allow sharing of tax information”, she pointed out. 

Laurence Tubiana, the economist who moderated the panel, said that the opportunity to advance the debate on international taxation cannot be lost: “I am thrilled. This would not have been possible a few years ago. This moment is a booster and I am grateful to Brasil for taking the lead on this issue. This is a very special opportunity.”

Haddad also asked for “liberals, conservatories, and progressives” to reach a consensus about the need to tax the super-rich. 

“Crises are the fruit of the lack of hope and we can give the world hope right now. We need the political courage to state what the world can expect from all of us here. The question is whether we want to face this in cooperation, or will choose to live with infamous intolerance, poverty, and wars. We have the means to make freedom and equality triumph”, he emphasis. 

Agenda

As part of the agenda of the IMF Spring Meetings, Minister Fernando Haddad will lead high-level ministerial meetings of the G20 Finance Track this Wednesday (18) and Thursday (19).

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