RI Runs Two-Pillar Solution, Sri Mulyani Affirms The Importance Of A Fair Global Tax System

Minister of Finance Sri Mulyani emphasized the importance of the existence of an international tax system that is fair, effective, and stable at the meeting of the Minister of Finance and the Governor of the Central Bank of the G20 Forum in Zimbali, South Africa.

"This is not just a matter of fiscal, this is a matter of global justice so that we can grow together," he said, quoted from the Instagram page @smindrawati, quoted Monday, July 27.

Sri Mulyani said that developing countries have equal rights in cross-border economic activity that occurs in their territory.

He added that Indonesia supports and has started implementing Two-Pillar Solution.

However, continued Sri Mulyani, these efforts did not stop there.

For your information, Two-Pillar Solution is a follow-up to the BEPS 2.0 action plan in order to overcome tax evasion and ensure the coherence of international tax regulations which ultimately aims to create a more transparent tax system.

The Two-Pillar Solution consists of two pillars, where pillar I prevents multinational companies from making big profits to re-allocate some of their profits to low-tax countries.

This policy prevents these companies from gaining significant profits in a country without paying taxes in the country where they run their business.

Then pillar II has a role in creating fair tax rates, namely preventing multinational companies from making certain arrangements to obtain tax profit from differences in tax rates in various countries through the imposition of minimum tax rates for multinational companies, namely implementing a Global Minimum Tax of 15 percent for multinational companies with a gross circulation of more than 750 million euros.

According to Sri Mulyani, the G20 forum must be a forum that ensures that no country is left behind in a more complex global tax system.

Therefore, Sri Mulyani underlined the importance of the role of the IMF, World Bank, and the UN forum to help developing countries build their capacity and maintain their fiscal sovereignty.

"Taxes are not just about the income of each country. It's about building an equal and sustainable world future," he concluded.