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G7 finance ministers progress on tax deal

Finance ministers from the Group of Seven said that they made some progress at reaching a joint position on a landmark global corporate tax deal, days before it needs to win over a wider international audience. The U.S. Treasury Department gave a statement that a common understanding was reached on some of the important open issues to support reaching final political agreement within the OECD Inclusive Framework in October. Britain brokered an outline agreement in June.

This is on a global minimum corporate tax rate of 15%. The Organization for Economic Co-operation and Development has been trying to shepherd through tax reform for years. And so they want to get full agreement on detailed proposals from 139 negotiating countries. Britain’s finance minister Rishi Sunak said that the meeting of finance ministers evidences the continued ambition and collaboration of G7 countries. This is for achieving historic global tax reform. So that they can ensure that the companies pay their fair share of tax in the countries they do business.

A British finance ministry spokesperson said that the G7 finance ministers had reached a common understanding on some important remaining issues before OECD and G20 tax meetings. Japanese finance minister Taro Aso said that there had been agreement on some points under discussion. French Finance Minister Bruno LeMaire also cited progress on key negotiating points. Irish finance minister Paschal Donohoe said that he expected the OECD to produce updated proposals in the coming days. He added that soon it will be a critical moment for the negotiations that have been underway for years and will show whether an agreement is possible. Ireland having a corporate tax rate of just 12.5%.

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Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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