G20 countries agree to exchange tax information to stamp out evasion

Meeting of G20 finance ministers in Australia endorses plan to automatically exchange information on a reciprocal basis by end of 2018

theguardian.com, Bridie Jabour, Sunday 21 September 2014

International Monetary Fund (IMF) managing director Christine Lagarde and
 Australia’s treasurer Joe Hockey before the main meeting of the G20 finance
ministers. Photograph: Reuters

G20 countries have agreed to start automatically exchanging tax information in an effort to erode global tax evasion.

The communique from the finance ministers’ meeting in Australia at the weekend endorsed a plan to automatically exchange the information on a reciprocal basis by the end of 2018.

The ministers called on all financial centres to make the commitment by the time of the global forum meeting in Berlin at the end of October and to support efforts to monitor global implementation of the new standard.

“We support further coordination and collaboration by our tax authorities on their compliance activities on entities and individuals involved in cross-border tax arrangements,” the communique said.

The meeting in Cairns also discussed the potential impact on the global economy of the Ebola outbreak in west Africa. The Australian treasurer, Joe Hockey, confirmed the economic risks of the outbreak had been discussed.

The International Monetary Fund has estimated measures put in place by the group will expand the global economy by 1.8%, just shy of the target of 2%.

“Of course there are events that could derail [the growth targets],” Hockey told reporters on Sunday. “We need to be ambitious, we need to give people hope that tomorrow and the years beyond are going to be better than today. We have to.

“As global finance ministers it is easy to be caught in the slipstream of negativity, to be caught in the slipstream of looking at a glass as being half full, or rather half empty. The views vary but the bottomline is we can’t be pessimistic about the future.”

The agreement on measures to lift growth was 90% complete but by the time the G20 leaders met in Brisbane in November there would be ‘concrete outcomes’, he said.

Hockey said the president of the World Bank, Jim Yong-kim, made “significant” contributions to the discussion about Ebola.

“There was a discussion about a number of other geopolitical risks as well. Having said that, we believe that the fundamentals of the world economy are good and we are trying to use the levers that we have to make them better,” Hockey said.

If the 1.8% growth rate is achieved it would add $2 trillion to the world’s economy within four years.

The managing director of the IMF, Christine Lagarde, said the two areas key to reaching a 2% target were the labour market and infrastructure. She said the 1.8% was taking the G20 “very close” to its objective.

“Is that to say mission accomplished? No. Clearly because there will be more needed – from 1.8 to 2% is a bit of a journey,” she said.

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Delegates prepare to hear the opening remarks at the G20 Finance Ministers

 and Central Bank Governors Meeting in Cairns on September 20, 2014

(AFP Photo/William West)