KOR-ENG Finance Ministers Agree on Cooperation to Finalize Digital Tax Proposal by October

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki attending the G20 Finance Ministers and Central Bank Governors Meeting held at the Arsenale Conference Hall in Venice, Italy, on the 10th (local time). [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, who is visiting Venice, Italy to attend the G20 Finance Ministers and Central Bank Governors Meeting, held a bilateral meeting with Rishi Sunak, UK Chancellor of the Exchequer, on the 10th (local time) and agreed to cooperate to finalize a reasonable digital tax plan by October, the Ministry of Economy and Finance announced.

The finance ministers of both countries exchanged views on the provisional agreement on the digital tax, which 130 out of 139 participating countries in the OECD Inclusive Framework (IF) recently agreed upon, and made this announcement. They also discussed expanding climate finance and carbon pricing.

Deputy Prime Minister Hong particularly recalled that Korea introduced an emissions trading system in 2015 regarding carbon pricing, stating, "When introducing carbon tax or carbon border tax, it is necessary to consider consistency and overlap with existing policies."

In response, Chancellor Sunak said, "Carbon pricing can be adopted differently by each country," but added, "However, the important thing is that the effects should be the same regardless of the method adopted."

Chancellor Sunak also emphasized the importance of establishing international standards for climate-related financial information and mandatory disclosure. Deputy Prime Minister Hong responded, "While I agree on the need to establish international standards, mandatory implementation should be pursued gradually considering each country's circumstances."

Meanwhile, on the same day, Deputy Prime Minister Hong also held a bilateral meeting with Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF). Both sides shared their views on the current global and Korean economies and discussed policy directions for early global economic recovery, economic structural transformation, and the role of the IMF.

At the meeting, Managing Director Georgieva inquired about Korea's position on the IMF Special Drawing Rights (SDR) reallocation worth $650 billion to support low-income countries. Deputy Prime Minister Hong stated that Korea plans to participate in the IMF SDR reallocation and expressed a positive stance on expanding loan resources for the Poverty Reduction and Growth Trust (PRGT) and establishing new trust funds.

Regarding this, Deputy Prime Minister Hong requested, "To encourage more countries to participate in SDR reallocation, voluntary contributions from member countries should be recognized as foreign exchange reserves." He also said, "When reviewing the IMF institutional view on capital flows scheduled for the end of this year, a flexible approach is needed to reflect the economic conditions of each country to respond flexibly to sudden capital inflows and outflows."

In response, IMF Managing Director Georgieva said, "The institutional view is being reviewed based on the analysis of each country's experience."

This content was produced with the assistance of AI translation services.