G20 leaders set to pledge to pursue tech giants for fair share of tax

Leaders due to promise to pay for equitable global distribution of Covid vaccines

Saudi Crown Prince Mohammed bin Salman attending the virtual G20 summit, which his country is hosting. Photograph: Bandar Al-Jaloud/Saudi Royal Palace/AFP via Getty Images.

Saudi Crown Prince Mohammed bin Salman attending the virtual G20 summit, which his country is hosting. Photograph: Bandar Al-Jaloud/Saudi Royal Palace/AFP via Getty Images.

 

Leaders of the world’s 20 biggest economies on Sunday will pledge to pay for a fair distribution of Covid-19 vaccines, drugs and tests around the world so that poorer countries are not left out, and to extend debt relief to them, a draft G20 communique has shown.

In the draft G20 statement, seen by Reuters, the leaders said: “We recognise the role of extensive immunisation as a global public good.”

The leaders said the global economy was starting to pick up but the recovery remained “uneven, highly uncertain and subject to elevated downside risks”.

They encouraged the multilateral development banks to strengthen their efforts to help countries deal with the Covid-19 crisis.

The draft also calls on private creditors to join the debt servicing moratorium, which the G20 wants to extend until the middle of 2021 and possibly longer, and endorses a common framework for dealing with debt issues beyond that.

“There is a lack of participation from private creditors, and we strongly encourage them to participate on comparable terms when requested by eligible countries,” it said.

The leaders also said they recognised the specific challenges faced by countries in Africa and small island developing states, reflecting growing recognition that even some middle-income countries may need debt relief as a result of the pandemic.

Keen to be better prepared for any potential next pandemic that might come, G20 leaders also said they would commit “to advancing global pandemic preparedness, prevention, detection, and response” and “to the continued sharing of timely, transparent, and standardised data and information”.

The EU has called for $4.5 billion by the end of the year from the G20 to pay for Covid-19 fighting tools for poorer countries.

Biden presidency

As Democrat Joe Biden prepares to replace Donald Trump as US president in two months, the G20 statement struck a bolder tone on international trade, climate change and the role of the World Health Organisation.

Mr Trump, who favoured bilateral deals, had this year threatened to quit the World Health Organisation unless it was reformed. His administration had also previously blocked mentions of climate change in G20 communiques.

“Supporting the multilateral trading system is now as important as ever. We strive to realise the goal of a free, fair, inclusive, non-discriminatory, transparent, predictable, and stable trade and investment environment, and to keep our markets open,” the G20 statement said.

The G20 also said they would pursue a way to tax international tech giants like Google, Amazon, Facebook, Apple or Microsoft so that they pay their fair share of taxes.

The internet giants have benefited greatly from the shift to teleworking forced upon the world economy by the pandemic, and some European countries have long been pushing to tax them where they make their profits, rather than where they establish their subsidiaries for tax optimisation purposes. But such an initiative has so far been stalled by the Trump administration.

The imminent change of guard in the White House also seemed to unblock bolder G20 language on climate change.

“Preventing environmental degradation, conserving, sustainably using and restoring biodiversity, preserving our oceans, promoting clean air and clean water, responding to natural disasters and extreme weather events, and tackling climate change are among the most pressing challenges of our time,” the G20 draft statement said.

“As we recover from the pandemic, we are committed to safeguarding our planet and building a more environmentally sustainable and inclusive future for all people,” it said.

King Salman

Saudi Arabia’s King Salman had opened the G20 summit, as the coronavirus pandemic overshadows this year’s gathering of the heads of state.

The crisis has transformed the summit from an in-person two-day meeting of the world’s most powerful leaders to a virtual gathering of speeches and declarations.

The pandemic, which has claimed more than 1.37 million lives worldwide, has offered the G20 an opportunity to prove how such bodies can facilitate international co-operation in crises, but has also underscored their shortcomings.

The G20’s member countries represent about 85 per cent of the world’s economic output and three-quarters of international trade.

“We have a duty to rise to the challenge together during this summit and give a strong message of hope and reassurance,” King Salman said in his opening remarks.

The kingdom, which assumed the G20 presidency this year, is the host of the virtual summit that is bringing together leaders from the world’s richest and most developed economies, such as the US, China, India, Turkey, France, the UK and Brazil.

King Salman urged G20 leaders to provide support to developing countries in a co-ordinated manner.

The Saudi monarch touted G20 efforts to inject more than $11 trillion into the global economy this year as stimuli to support businesses and the most vulnerable.

He also commended the group for extending protections to those most impacted by the global economic recession, including the G20 decision to suspend debt payments for the world’s poorest countries until mid-2021 to allow those nations to focus their spending on healthcare and stimulus programmes.

“I am confident that the Riyadh summit will deliver significant and decisive results and will lead to adopting economic and social policies that will restore hope and reassurance to the people of the world,” King Salman said. – Reuters/AP