The G20 and Tax Dodging
There has been a lot of talk about the G20 in recent months, and there will be even more in the lead up to the meeting in Brisbane in November. For all the discussion surrounding this powerful group of nations, I am the first to admit that at the beginning of this year I scarcely understood the function of the G20 and the important role that it plays in the international system. So I thought for those of you playing along at home, I would share what I have picked up along the way.
The G20 is the world’s most robust economic decision-making body. It compromises of the old well-established superpowers as well the up and coming economic heavy weights – the United States, China, Germany, Japan – it is a veritable whose who of the international system. What you will notice is that developing countries don’t have a strong voice at the table advocating their interests.
One of the issues being addressed at the G20 particularly affects developing countries – tax dodging by multinational companies. At the moment, the international tax system is broken; there are loopholes that allow wealthy multinational companies and individuals to minimise the amount of tax that they pay. While this issue impacts all nations, developing countries are arguably the most affected. On average, developing countries draw 20% of their revenue from corporate income tax (as opposed to 8-10% for developed countries). This means they are losing valuable revenue that could be used to fund public services, including: education, roads and healthcare.
In under two weeks, hundreds of young Australians will be roadtripping across the country and gathering support along the way. On Thursday October 2 they will arrive in Canberra and meet with our politicians to implore them to ensure that developing countries interests are represented at the G20.
The question still remains: what can a bunch of people sitting around a table talking about tax achieve? The answer is that a commitment to fix the loopholes in the international tax system and specifically include developing countries in those reforms would be a massive milestone in the movement to end poverty! But it is only the beginning! Those world leaders will go back to their home countries and we will need to continue to advocate to see those changes implemented.