G20 Meeting Tense, Sri Mulyani Reveals Global Digital Tax Plan Is The Cause

Minister of Finance Sri Mulyani (Photo: Screenshot of the G20 digital channel)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that the agenda for the meeting on the last day of the 1st Finance Ministers and Central Bank Governors (FMCBG) in Jakarta, there was quite a tough discussion among the G20 countries.

According to the Minister of Finance, the final agenda is oriented to the attitude of members in designing a more comprehensive and sustainable global tax structure for the future.

“This discussion seeks an international agreement concerning two pillars. First, the pillar is regarding taxation in the digital sector which has been one of the most tense issues among G20 countries and around the world," he said through a virtual channel when holding the closing press conference of the 1st FMCBG, Friday, February 18.

The Minister of Finance revealed that the aspect of discussing digital taxes is quite sensitive considering that this sector works across borders and is usually not related to the jurisdiction of a particular country. For this reason, the agreement that has finally been reached by the members is a big part in designing global digital tax regulations.

"The tax mechanism has been agreed, especially regarding the digital sector that moves internationally or globally," he said.

To note, today's 1st FMCBG closing press conference has been delayed by almost three hours from the original schedule which was supposed to take place at 17.00 WIB.

Furthermore, the state treasurer explained that the second pillar agreed on in international taxation was regarding the active role of the G20 to prevent multinational companies from defaulting on their obligations.

"The next pillar is regarding the global minimum taxation for companies that move between countries, which could possibly lead to efforts to avoid taxes," he said.

For this reason, the Minister of Finance appreciates the commitment of G20 members who can see this issue objectively and provide the same support.

"All countries jointly take steps to anticipate what taxpayers (multinational companies) might do to avoid taxation, and this already has a framework for cooperation," said Minister of Finance Sri Mulyani.