G20 advocates for “Tax Fairness”: Finance ministers propose wealth tax on billionaires in Rio de Janeiro

Finance ministers and bankers from the G20 have agreed to push for more effective taxation of the ultra-wealthy, according to a statement issued on Friday following a meeting in Rio de Janeiro, which will host the G20 summit in November.

“With full respect for fiscal sovereignty, we will seek to cooperate to ensure that individuals with ultra-high net worth are effectively taxed,” the statement read.

“Wealth and income inequalities undermine economic growth and social cohesion, and exacerbate social vulnerabilities,” it continued.

The sensitive issue of cracking down on billionaire tax evasion dominated the two-day meeting in the Brazilian city that will host the G20 summit this November.

IMF Managing Director Kristalina Georgieva praised the G20’s stance on “tax fairness,” calling the decision to cooperate on taxing the ultra-wealthy “timely and welcome.”

Who’s Behind the Initiative?

The initiative is a key priority for Brazilian President Luiz Inácio Lula da Silva, who is chairing the group of major world economies this year.

Lula had hoped for a minimum tax of 2% on the wealthy elite, but the final statement represents a compromise on a contentious issue among member states.

According to a report by French economist Gabriel Zucman commissioned by Brazil, billionaires currently pay the equivalent of 0.3% of their wealth in taxes.

A 2% tax could raise between $200 billion and $250 billion annually from about 3,000 individuals globally.

These funds could be used to finance essential public services such as education and healthcare and support efforts to combat climate change. Implementing this measure could also reduce economic and social inequalities, contributing to greater global stability.

In this context, critics emphasize that the uniform and effective enforcement of the new tax regulations will be crucial for the success of the initiative and for preventing international tax evasion.