IMF WB Spring Meetings - G20 FMCBG Session 2: G20 Priority Issues
Remarks by Angel Gurría
12 April 2019 - Washington, United States
(As prepared for delivery)
Dear Ministers and Governors,
The OECD’s work on international tax has long had the strong support of the G20. We have made great strides in the areas of tax transparency, the implementation of the BEPS measures to tackle corporate tax avoidance and in supporting capacity building in developing countries.
The key issues that we are currently addressing are the tax challenges arising from the digitalisation of the economy. The status quo is not an option and the danger we are working against is a fragmentation of the international tax framework, with individual countries going their own way, which would be damaging to all. G20 countries have taken a true leadership role here and I am pleased to say there is good progress. The 129 members of the Inclusive Framework agreed in January to explore options under two pillars. The first pillar looks at how the key features of digitalisation should affect the allocation of taxing rights among countries. These features include: “scale without mass”, the reliance on intellectual property, and the role of user contributions. The second pillar serves as a backstop to the first, giving jurisdictions a right to ensure a minimum level of tax where income is subject to no or only very low taxation.
Reaching agreement will require a truly collaborative effort. We have just had a very productive public consultation, with almost 400 participants, which will inform and enrich the debate. The Inclusive Framework is now further developing these options so that, during our meeting in Fukuoka in June, we can deliver a work plan leading to a long-term, consensus-based solution. A final report is due to the G20 by the end of 2020. The continued support, unity and leadership of the G20 on this issue is key to the success of this work.
I’m also very pleased to announce that we have nearly completed the revision of the OECD Code of Liberalisation of Capital Movements and that we will be able to deliver the revised Codes to Leaders at the Summit in June. The revised Code is better adapted to current capital flow management requirements and financial stability imperatives, has more effective governance, and closer links to other International Organisations. In other words, it is stronger and more relevant globally. The revision and the ongoing adherence of Argentina, Brazil and South Africa demonstrate more than ever the relevance of the Code as a necessary piece of the international financial architecture. Adherence should remain, I believe, an aspiration for all G20 countries.