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GANDHINAGAR — G20 finance ministers on Tuesday discussed strategies to implement strategies for overhauling the global tax norms to ensure that multinational companies pay taxes wherever they operate.
The two-day G20 finance ministers and central bank governors meeting being held under India's Presidency also discussed ways to help low and middle-income countries reeling under huge debt burdens.
The meeting chaired by Finance Minister Nirmala Sitharaman invited views on the way forward in international taxation with regard to the implementation of measures to check tax evasion.
[bsa_pro_ad_space id=1]"Finance Ministers and Governors were also invited to discuss strategies for capacity building to support the implementation of 'Two Pillar Solution' and enhancing global #taxtransparency under #G20India Presidency," the Finance Ministry tweeted.
Session 4️⃣ at the third Finance Ministers and Central Bank Governors #G20FMCBG meeting discussed issues related to International Taxation in #Gandhinagar.
— Ministry of Finance (@FinMinIndia) July 18, 2023
Union Finance Minister Smt. @nsitharaman invited views of her counterparts on the way forward considering the outcome of the… pic.twitter.com/p2VBVhTkos
The proposed two-pillar solution consists of two components, including the reallocation of multinational companies' additional share of profit to the market jurisdictions where they operate.
The second component is about having a global minimum tax of 15 per cent for multinational companies.
The Organisation for Economic Co-operation and Development (OECD) in an outcome statement last week said that a few jurisdictions have expressed concerns "with some specific items" in the Multi-Lateral Convention (MLC).
"Efforts to resolve these issues are underway with a view to prepare the MLC for signature expeditiously," the OECD said.
India has been calling for G20 countries to ensure that the developing nations are guarded against any "unintended consequences" of the proposed global minimum tax deal.
Developing countries make up almost one-third of the membership of the G20 inclusive framework for taxation.
Ministers and governors discussed the progress under G20 Common Framework and engaged on ways for swift and timely resolution of debt treatment for countries most in need, the finance ministry said in another tweet.
G20 Indian Presidency releases Press Release of the third G20 Finance Ministers and Central Bank Governors #G20FMCBG meeting held in #Gandhinagar 👇
— Ministry of Finance (@FinMinIndia) July 18, 2023
Read more ➡️ https://t.co/rmGK4juOJO#OneEarthOneFamilyOneFuture #VasudhaivaKutumbakam @g20org @RBI pic.twitter.com/GtQczePSrK
Under the G20 Presidency, India has been pressing for ways to tackle the aggravated debt vulnerabilities facing developing nations mainly on account of the continuing geopolitical tensions and the pandemic.
It is feared that if left unaddressed, the mounting debt vulnerabilities of developing nations could trigger a global recession and push millions to extreme poverty.
In December last year, World Bank said the world's poorest countries owed $62 billion in annual debt service, a 35 per cent growth of over $46 billion in 2021, triggering a higher risk of defaults.
The low-income countries are at high risk of debt distress or are already in it and debt crises are also spreading to middle-income countries.
On the opening day of the ministerial conference on Monday, finance ministers of the G20 nations, which is a grouping of developed and developing countries, discussed the global economy and risks, issues related to crypto assets as well as policy measures for promoting green and low-carbon technologies.