G20 fo­cuses on tax loop­holes

Weekend Argus (Saturday Edition) - - BUSINESS -

MOSCOW: The Group of 20 na­tions backed a tax plan yes­ter­day that takes aim at the loop­holes used by multi­na­tional firms and re­sponds to anger among vot­ers hit with higher tax bills to cover soar­ing national debts.

Fi­nance min­is­ters and cen­tral bankers also fo­cused on charting a course to­wards global eco­nomic re­cov­ery, and seek­ing to calm wor­ried fi­nan­cial mar­kets.

The G20 now faces a mul­ti­speed global econ­omy in which only the US ap­pears to be near­ing a self-sus­tain­ing re­cov­ery.

China is suf­fer­ing a slow­down amid doubts over the sta­bil­ity of its fi­nan­cial sys­tem, Ja­pan has only re­cently em­barked on a rad­i­cal fis­cal and mone­tary ex­per­i­ment, and Europe’s econ­omy is more stop than go.

Col­lec­tive ef­forts to bal­ance the prospect of a withdrawal of US mone­tary stim­u­lus against ex­pan­sion­ary poli­cies are needed for the strug­gling economies.

Chair­man Ben Ber­nanke’s guid­ance in May that the Fed may start to wind down its $85bil­lion (R841bn) in monthly bond pur­chases – in­tended to ease the flow of credit – trig­gered a steep sell-off in stocks and bonds, and a flight to the dol­lar.

In­vestors were calmed by dovish tes­ti­mony to the US Congress this week by Ber­nanke, who is not com­ing to Moscow. Yet emerg­ing mar­kets have un­der­per­formed.

There will be some fo­cus on cen­tral bank’s giv­ing so-called for­ward guid­ance, es­sen­tially man­ag­ing mar­ket ex­pec­ta­tions. “(It is) cru­cial for pre­vent­ing se­ri­ous volatil­ity on fi­nan­cial mar­kets,” Rus­sian Fi­nance Min­is­ter An­ton Silu­anov said.

The Brics cau­cus – which in­cludes South Africa – was also due to meet. – Reuters

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.