The two-day financial leaders Group of 201 (G20) failure to implements a global taxation system for the digital era starting 2020 - Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – The two-day financial leaders Group of 201 (G20) failure to implements a global taxation system for the digital era starting 2020, global media reported yesterday (02/23). At last year meeting at Osaka, Japan, the ministers and central bankers agreed to collect tax from the tech companies.

“There is a consensus to build a solution by the end of 2020. Lets be clear – either we have at the end of 2020 an international solution… clearly in the interest of all countries and digital companies, or there is no solution and … then it will be up the national taxes to enter into force,” France finance minister, Bruno Le Maire told reporters at the sidelines of the meeting in Riyadh, Saudi Arabia, on Sunday.

Followed the decisions, the leaders encouraged further work by the Organization for Economic Cooperation and Development (OECD) on the global rules to tax digital giants like Google (GOOGL.O), Amazon (AMZN.O) and Facebook (FB.O). The OECD wants to agree on technical details of such a tax by July.

United States (US) treasury secretary, Steven Mnuchin commented, the issue was being addressed in negotiations with the OECD, and he hoped it could be resolved by the end of the year. But, he noted, Washington would strike back at the digital taxes passed by France and others if those efforts failed.

“We’ve been very consistent in saying we think the digital services tax is discriminatory in nature against digital companies, and specifically a handful of US companies,” he said as quoted by Reuters.

France and the US have declared a truce to allow the multilateral talks to reach a conclusion by year-end. Mnuchin claimed, his country would respond with investigations and potential retaliatory tariffs if countries decided to go it alone, outside the OECD deal.

According to Le Maire, the countries to address the issue of digital companies making profits in many countries without any physical presence, which means without paying the due level of taxes. While, Saudi finance minister, Mohammed Al-Jadaan, stated this year would represent a key test for tax transparency worldwide.

“Today, members of the G20 and OECD work together to implement the internationally agreed standards on tax transparency. These standards balance the need to access information for tax purposes and the need to protect taxpayers’ confidentiality,” said Al-Jadaan.

More than 6,100 bilateral exchange agreements had been signed and that tax-authorities worldwide were now collecting tax revenues utilizing the automatic exchange of information mechanism, said the minister.

“Information on 50 million financial accounts was exchanged by the end of 2019 for a total value of about 5 trillion Euros (US$5.43 trillion), and almost 100 billion Euros in additional tax revenues have been identified,” noted by Al-Jadaan.

A final agreement on the global rules is to be ready by the end of this year to avoid a proliferation of different digital tax regimes all over the world, he continues.

While, Indonesia’ finance minister, Sri Mulyani Indrawati stressed that Indonesia provided support to the OECD to immediately complete the formulation of digital economic taxation. She hopes that this institution develops an international taxation architecture by creating a fair, simple, transparent and pro-tax system in favor of developing countries.

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Written by Staff Editor, Email: thinsiderstories@gmail.com