ICC responds to G20 Finance Ministers’ commitments

ICC Secretary General John W.H. Denton AO said:

“The importance of the mandate given to the IMF by G20 Finance Ministers to draw up plans to issue US$650 billion in new reserve assets cannot be overstated: that new liquidity cannot flow soon enough to the real economy in emerging markets. Time is very much of the essence to ensure all countries have the necessary means to get the spread of Covid-19 under control and support small businesses and families struggling to make ends meet while the pandemic persists.

“But it would be a mistake for anyone to think boosting the IMF’s war chest will be sufficient on its own to get the global economy back on track. Many businesses will understandably feel the G20 is still handing out sticking plasters rather than setting the foundations for a durable recovery. That’s why we’re calling for a new global solidarity package of sufficient scale to liberate all economies from the grip of the pandemic. At its core that means getting sufficient funds on the table to get vaccines to everyone who needs them and definitively resolving the debt crisis now faced, we estimate, by the majority of the world’s countries.”

Commenting on the latest commitments from the G20 on global tax reform, Mr Denton added:

“We commend the commitment from G20 Finance Ministers to conclude ongoing negotiations to modernise the global tax system by July. With public balance sheets constrained, we see a clear risk of governments adopting unilateral tax measures that will likely chill the very cross-border investment and entrepreneurship needed to drive a post-pandemic recovery.

“Instability in the global tax system acts as a heavy disincentive to small businesses looking to expand internationally – an outcome that, simply put, no economy can afford. We urge G20 governments to stay true to the words of their finance ministers today and commit the necessary political capital to reach effective and consensus-based solutions to the challenges of digitalisation in addressing taxation rights and an appropriate global minimum tax rate.”