G20 Deputy Finance Ministers Meeting: "Detailed Issues of Digital Tax Must Be Agreed by October G20 Meeting"

[Sejong=Asia Economy Reporter Kim Hyunjung] The Ministry of Economy and Finance announced that the G20 member countries agreed that a consensus on the detailed issues of the digital tax must be finalized by the G20 Finance Ministers and Central Bank Governors meeting scheduled for October.

According to the Ministry on the 15th, Yoon Tae-sik, Director General for International Economic Affairs, attended the G20 Deputy Finance Ministers and Central Bank Deputy Governors meeting held on October 13-14 (local time) in Naples, Italy.

At the meeting, Director General Yoon emphasized the need to reach an agreement on the remaining issues in the digital tax discussions, such as the Pillar 1 excess profit allocation rate, and argued that reasonable consideration is necessary for newly included sectors such as business-to-business (B2B) transactions in the digital tax imposition discussions.

The Pillar 1 excess profit allocation rate refers to applying an allocation rate of 20-30% to excess profits exceeding the normal profit margin of 10% of global profits, thereby allocating taxing rights to the market jurisdictions. He also stated that the implementation schedule of "legislation completed in 2022, effective in 2023" should take into account each country's legislative conditions.

The member countries expressed support for expanding the IMF low-income country support fund (PRGT) using the IMF SDR general allocation resources and discussed necessary matters related to the establishment of a new fund (RST). Many member countries agreed on the need to accelerate debt restructuring for low-income countries and urged the preparation of improvement measures such as setting deadlines for debt restructuring.

Additionally, Director General Yoon mentioned three tasks for stabilizing the international financial market: ▲ prompt expansion of resources for the IMF low-income country support fund and discussion on the establishment of a new fund ▲ strengthening efforts to alleviate the debt burden of low-income countries, including debt restructuring for Chad, Ethiopia, and Zambia ▲ efforts to mitigate excessive capital flow volatility in emerging markets.

Furthermore, Director General Yoon consulted with Indonesia’s Deputy Finance Minister Sumintho and Central Bank Deputy Governor Dodi, the next G20 presidency country, on expected agenda items for next year such as post-COVID-19 exit strategies, decoupling phenomena between low-income and advanced countries, and sustainable finance. He also discussed with international organization officials including IMF Director of Strategy, Policy, and Review Department Fazarbarioglu and World Bank Secretary-General Trosenberg on low-income country SDR support measures and global vaccine supply issues.

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