The meeting of the G20 finance ministers and central bank governors in Chengdu on 23 and 24 July 2016 was the last such meeting before the G20 summit of heads of state and government. China will hand over the G20 presidency to Germany in December 2016.
Before the G20 meeting, a ministerial-level international tax symposium took place at the invitation of Germany and China. The event focussed on the subject of tax certainty. The primary aim is to ensure a reliable tax policy framework for businesses, thus creating favourable conditions for investment. The subject will be taken up again during Germany’s presidency. Participants also discussed how a tax system should be structured to encourage innovation and growth while at the same time ensuring that all parts of society benefit.
At the G20 meeting that followed, German Finance Minister Wolfgang Schäuble called upon the G20 to work towards a global agreement to introduce a financial transaction tax (FTT). Here too, the aim is to achieve a fair and balanced tax system. These efforts would build on the G20’s successful cooperation in tax matters and would aim to bring tax conditions in the financial sector in line with those in other economic sectors. Minister Schäuble also stressed that the G20 needs to deal with the tax policy challenges arising from the spread of digital technologies. Implementing the results of the BEPS (Base Erosion and Profit Shifting) project and improving tax transparency remain important topics on the tax policy agenda as well.
As expected, the discussions about the state of the global economy included an extensive debate about the impact of the UK referendum on EU membership. The finance ministers and central bank governors believe the G20 is well equipped to deal with the economic consequences. The participants also took a close look at the role played by multilateral development banks in infrastructure investment in developing countries. Finance Minister Schäuble underlined the importance of private capital and the need for infrastructure in Africa.
For many developing countries, remittances from migrant workers play an important role. Germany called for clear rules allowing banks to continue to operate in this area. However, these should not compromise the fight against money laundering and the financing of terrorism.
At the meeting, the G20 also decided to strengthen the institutional structures of the Financial Action Task Force (FATF), an international body dedicated to combating money laundering, terrorist financing and proliferation financing. The FATF will submit proposals to this end by March 2017.