India, China, the US and other G20 leaders today pledged to continue supporting international tax co-operation to achieve globally fair and modern international tax system, foster growth and refrain from competitive devaluation of currencies.
“We will continue our work on addressing cross-border financial flows derived from illicit activities, including deliberate trade misinvoicing, which hampers the mobilisation of domestic resources for development…,” said the G20 Leaders’ Communique after the two-day summit here.
The leaders vowed that they “will continue our support for international tax co-operation to achieve a globally fair and modern international tax system and foster growth, including advancing ongoing co-operation on Base Erosion and Profit Shifting (BEPS), exchange of tax information, tax capacity-building of developing countries and tax policies to promote growth and tax certainty”.
G20 member-states represent 85 per cent of the world’s GDP. Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the European Union make the G20.
Indian Prime Minister Narendra Modi, who participated in the Summit, also held several bilateral meetings on the sidelines.
The leaders said growth must be shored up by well-designed and co-ordinated policies.
“We are determined to use all policy tools – monetary, fiscal and structural – individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth,” the communique said.
Monetary policy, they said, will continue to support economic activity and ensure price stability, consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth.
Underscoring the essential role of structural reforms, “we emphasise that our fiscal strategies are equally important to support our common growth objectives. We are using fiscal policy flexibly and making tax policy and public expenditure more growth-friendly…”.
Our relevant authorities will consult closely on exchange markets, they said.
“We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes. We will carefully calibrate and clearly communicate our macroeconomic and structural policy actions to reduce policy uncertainty, minimise negative spillovers and promote transparency,” the G20 heads said.
The communique further said the G20 nations will continue to closely monitor, and if necessary, address emerging risks and vulnerabilities in the financial system, including those associated with shadow banking, asset management and other market-based finance.
Recognising the detrimental effects of corruption and illicit finance flows, it said “we will reinforce the G20’s efforts to enhance international co-operation against corruption, while fully respecting international law, human rights and the rule of law as well as the sovereignty of each country”.