KPMG’s Merriden Varrall discusses what role nationalism may play at the G20 Leaders’ Summit to be held in Argentina this week, and what this may mean for attempts to improve the global tax system.
The theme for the upcoming Group of Twenty (G20) Leaders’ Summit to be held in Argentina is ‘Building Consensus for Fair and Sustainable Development’. As the “premier forum for international economic cooperation”, the G20 brings together advanced and emerging economies to, among other things, improve the fairness of the global tax system. But have the host country or the participants taken the current geopolitical environment into account in considering their goals or how to achieve them?
Official rhetoric around the 2018 G20 is rich with the language of dialogue, cooperation, inclusiveness, fairness, integration, and consensus. The Argentine presidency is focusing on three key issues. The first, the future of work, is about how embracing technology can unleash human potential, and overcome exclusion, social disintegraion or backlash – if done well. The second is mobilising private resources to develop much-needed infrastructure for development. Food security is the third item on the agenda.
For tax policy, G20 2018 emphasises addressing the challenges presented by technological change, particularly digitalisation. The host notes that fighting against tax avoidance and evasion is key. Goals include the timely implementation of transparency commitments, actions to avoid base erosion and profit shifting, and addressing “fundamental questions around how the digital economy generates values, where value is created, and how taxes can be reported and collected fairly, efficiently, and without creating barriers to innovation”.
These are all valuable and important goals. To achieve them, G20 leaders need to ensure they situate their discussions in the reality of the current global environment. The present global context is one not of economic logic, but of political imperatives; not of cooperation, but of rising nationalist sentiment. Rather than focusing on global public goods, more and more countries around the world, some of whom were the bulwarks of multilateralism and openness, are adopting the approach of ‘me first’.
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