G20 ‘to cooperate for global growth’

10 September 2013

The Group of 20 countries have agreed to increase their level of cooperation in a bid to boost inclusive global growth, Finance Minister Pravin Gordhan said on Monday.

Briefing journalists in Pretoria on Monday on last week’s G20 Summit in St Petersburg, Russia, Gordhan said that the leaders had agreed to work together to ensure that policies were implemented to support domestic and global growth and financial stability.

“There is an absolutely crucial need for the G20 to take a central role … and find areas of cooperation and synergy … to ensure both [emerging and developed] economies continue to better utilise [resources].”

Gordhan added that the G20 countries would individually implement their own initiatives to fight poverty, inequality and unemployment.

According to the St Petersburg Action Plan, South Africa would, among other things, take steps to overcome energy constraints by “starting the process to build a third coal-fired power plant and finalise the process of authorising shale gas exploration in a responsible and environmentally friendly manner”.

Cross-border tax evasion, profit-shifting

The G20 countries would also start sharing tax information in a bid to curb cross-border tax evasion and profit-shifting by multi-national companies, Gordhan said.

On Friday, the G20 leaders signed a New Tax Plan which would make it more difficult for companies to hide money in tax havens, compelling them to pay tax in the countries where they made their profits.

“On base erosion, profit-shifting and acting against tax evasion globally, the key milestone that was reached was an agreement … on the automatic exchange of information,” Gordhan said

“Until now, the regime for interaction between tax authorities from different countries relied on double taxation treaties, which provided for the exchange of information, but that exchange of info was per request.

“What we have now is a situation where administrations will agree on a protocol informed by a process through the EOCD [Organisation for Economic Co-operation and Development], where a level of discretion on whether you want to supply something or not, a greater degree of automatic responses will become [central to the] process.”

Gordhan said that the BRICS (Brazil, Russia, India, China and South Africa) nations had met on the sidelines of last week’s summit to discuss and finalise the formation of a BRICS-led development bank.

While he could not give further details on the bank’s structure and funding, he said progress had been made, and that Brazil had been appointed to lead the process of forming the bank ahead of the next BRICS summit in Brazil.

Source: SAnews.gov.za