UNDP chief advocates closing tax loopholes that benefit the ultra-rich

The head of the United Nations Development Program (UNDP), Achim Steiner, advocated this Wednesday to close tax loopholes and discuss a minimum universal tax for the super-rich in the face of concentration “extraordinary” of wealth.

“The richest are capable of not paying their fair share of taxes because they operate globally“said the economist at the Biennial Pavilion in the Brazilian city of São Paulo, where he is attending the G20 meeting of economic ministers as a representative of the United Nations.

In that sense, Steiner welcomes the willingness of Brazil, which holds the temporary Presidency of the group, to open the debate on the new rate at the meeting to be held this Wednesday and Thursday, although he says he has not yet seen a concrete proposal. of the South American country.

“It is the right time, both because of the extraordinary concentration of wealth and because of the difficulties countries face in investing in the new generation of technology and digitalization, for which resources are key.“, he claimed in an interview with EFE.

The German-Brazilian official believes that there is a “universal consensus on the need to deal with tax loopholes that create unfair competition between countries”, in line with the recent OECD proposal to create a minimum tax of 15% on the profits of multinationals.

“Our work at the United Nations will depend on what the Member States agree to, perhaps a new instrument”he added.

Of course, the head of the UNDP warned that many developing nations feel that the current negotiations around a new international tax system “do not adequately reflect your interests”.

Relieve the burden of debt

In the absence of adequate taxes for the ultra-rich, Steiner highlighted the importance of investing in social safety nets for the most vulnerable in order to reduce inequalities in Latin America and promote growth.

“Of all the regions in the world, Latin America is the one with the lowest growth forecast after the pandemic, with inflation and high interest rates making the situation much more complicated.“, says.

In this context, the head of the UNDP defends the need to alleviate the burden of debt in developing countries, which face increasing challenges in paying it due to increasing interest rates.

“For some countries in the region, going to capital markets has become prohibitively expensive.“, he stated, before adding that there are governments that already spend more money on debt payments than on education or health.

Many developing nations think, Steiner said, that the instruments devised during the COVID-19 pandemic to suspend debt payments provided “a temporary relief” and that no longer respond to current challenges.

“We need to raise the issue of debt restructuring, and there are many ways this could be done now”, he assured.

If this is not done, there is a risk that the distance between developed and developing countries will widen, after decades of economic convergence.

“We are in a period that can be profoundly disruptive because the poorest countries are not recovering as quickly and we are going to see divergence instead of convergence”, he warned.