G20 commits to effective taxation of the ultra-wealthy

The G20 said that the group agreed on working to make sure super-rich individuals around the world are effectively taxed but stopped short of elaborating on methods.

The group said on Friday it is important for all taxpayers, including ultra-high-net-worth individuals, to contribute their fair share in taxes.

"Aggressive tax avoidance or tax evasion of ultra-high-net-worth individuals can undermine the fairness of tax systems, which comes along with a reduced effectiveness of progressive taxation," according to a G20 Ministerial Declaration on International Tax Cooperation.

"No one should be able to evade taxation, including by circumventing transparency standards. Therefore, greater efforts should be made to ensure full compliance with domestic tax obligations," it added.

Despite the consensus on taxing the super-rich, mechanisms of achieving the goal remain vague.

"Each jurisdiction should work autonomously or, if necessary, through capacity-building initiatives to improve the effectiveness of revenue collection for taxes, which already today could be levied based on domestic law," said the group.

"Cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices," it added.

Scepticism

Member countries said they would continue to discuss the issues in the G20 and other relevant forums, counting on the technical input of relevant international organisations, academia and experts.

Some observers remained sceptical about the chances of a global "billionaire tax" targeting the world's largest capital-holders.

European officials pointed out that not even the 27-nation European Union has the power of taxation as a bloc.

Although France lent early support to a global minimum wealth tax, Germans have offered stiff resistance.