CAIRNS, AUSTRALIA (TIP): The world’s 20 largest economies are expected to signal a fresh push to check tax evasion by agreeing on deadlines for new measures and call for boosting global growth, through a quicker pace of reforms, when finance ministers and central bank governors from these countries meet here this weekend. “The base erosion (and profit sharing, or BEPS) work done by OECD will have a timetable out of Cairns.
If not, then certainly by the leaders’ summit in November. As for the reporting standards, I hope it’s addressed this weekend. In fact, we will address it this weekend… we do want tax authorities to be able to exchange information more readily,” Australian treasurer Joe Hockey told reporters ahead of the meeting of the ministers from countries that account for 85% of the global economy.
He, however, said India‘s demand for sharing of tax- and bank-related information on a retrospective basis may not be feasible. “It is a big systemic change for banks. If Australia went hard and early, it would cost a quarter of a billion dollars ($250 million) to the banks, which ends up being passed on to customers. But, if we do it in a sensible and timely fashion, it will cost barely 20% of that. It’s very hard to have that information prepared in a format on a retrospective basis.
It’s also hard to go back in time,” he said when asked specifically about India’s demand. Exchange of information and BEPS, which seeks to tax multinationals that avoid paying taxes anywhere, are of key importance to India as it seeks to widen its tax base. At the last meeting of the FMs and central bank governors in February, G20 members had agreed to work towards achieving both the goals. While adding 2% growth to the economies over the next five years was identified as a priority by Hockey, it is not clear how the G20 will push for it, given that every country is taking steps that suit its interests more.
In fact, the US Federal Reserve’s decision on interest rates and further tapering of the stimulus induced to boost growth are being keenly watched. Asked about action by individual countries and its impact, Hockey acknowledged that G20 could do little.
G-20 LEADERS SET TO CHECK TAX EVASION
