A meeting of the same ministers and central bankers in Sao Paulo in February failed to produce a joint statement after Russia and major Western nations failed to agree on how to describe the war in Ukraine and the Israeli offensive in Gaza.
The new approach may help shift attention toward economic cooperation on issues such as climate change and poverty. Two Brazilian government officials said the hosts also hoped to win increased support for a proposed global tax on the super-rich that Brazil has made a priority of its G20 presidency.
Pressure has been mounting to make progress before the next meeting of the financial working group in October, the last before the G20 summit of heads of state in November, when the US election is due to take place.
“We are going into July knowing that we have to close deals. October will be completely overshadowed by the US elections,” said one of the Brazilian officials, who asked to remain anonymous in order to speak openly.
The strong voting intention of former US President Donald Trump, who has called for massive tax cuts for individuals, could undermine the idea of a global tax for billionaires. Brazil continues to prioritize a joint declaration on international tax cooperation during its G20 presidency.
Another Brazilian official, who asked not to be named, said taxation was “a central issue in the financial arena this year, regardless of the U.S. elections.”
Brazil has secured support from Belgium, Colombia, France and Spain, as well as the African Union and South Africa, which will hold the G20 presidency next year.
Brazil is seeking further support by presenting the proposal as a way to make the global tax system more progressive, in line with its G20 agenda to reduce global inequality.
This marks a shift from the approach Brazil took in Washington in April, when it linked the billionaires tax proposal to climate policy financing and global poverty reduction during the spring meetings of the IMF and World Bank.
Brazil’s proposal, drawn up by French economist Gabriel Zucman of the EU’s independent Fiscal Observatory, envisages an annual tax of 2% on fortunes exceeding $1 billion, which could raise up to $250 billion a year from some 3,000 individuals.
