The G20 group has expressed determination to crack down on multinational corporations seeking tax evasion in their home countries. The decision came after Britain, France and Germany called on the participants of a two-day summit in Moscow, which ended on Saturday, to curb the practice of shifting profits from a firm’s home country to another state with the aim of avoiding less tax payments.
In a joint communiqué issued at the end of the summit, finance ministers and central bankers of the world’s top economies said, “We are determined to develop measures to address base erosion and profit shifting.”The finance ministers of France, Germany and Britain in a joint news conference on Saturday called for a broad change of law, saying that tax evasion was still technically legal. In Britain, Starbucks Coffee Company was grilled following the revelation last year that it had paid just 8.6 million pounds ($12.9 million) in British corporation tax since 1998, despite profiting three billion pounds. The participants in the summit also pledged not to promote their economies through currency manipulation. Managing Director of the International Monetary Fund Christine Lagarde called for dialog and deliberation to resolve currency worries. Duvvuri Subbarao, the governor of the Reserve Bank of India, told reporters in Moscow on Saturday, “Currency wars are globally suboptimal because if one country devalues its currency, the other country can strike it and everybody gets in a circle.” AO/HSN