G20 meeting highlights impact of COVID-19 on remittances

A virtual discussion is underway during the event.

The UAE recently participated in the second G20 Finance Track Global Partnership for Financial Inclusion (GPFI) meeting, which took place virtually.

The meeting discussed the impact of COVID-19 on remittances, future developments and possible solutions to existing challenges for cross-border payments and remittances, digital financial solutions to promote resilience and financial literacy, and the financing of micro, small and medium enterprises (MSME) and digital financial inclusion.

Mariam Al Hajri, Deputy Director of the General Budget at the Ministry of Finance; as well as Thuraya Al Hashemi, Project Manager at the Ministry of Finance, represented the United Arab Emirates G20 team attending the meeting. Members of the G20 and invited countries, non-G20 invited members of the GPFI, representatives of international organizations and GPFI affiliate partners attended the meeting which was held this year under the Italian presidency of the G20.

During the meeting, the UAE G20 team discussed the UAE’s global competitiveness in low-cost remittances, which is one of the important G20 goals and Sustainable Development Goals at the 2030 horizon.

The team also looked at the country’s second place in the global ranking on the list of remittance exporters, noting that what the UAE has been able to achieve in this area is due to advanced digital infrastructure and networks. interconnected payment systems available in the country’s financial sector.

The UAE also called for greater global collaboration on exploring the use of stablecoins and blockchain networks to enable faster, cheaper and more secure transactions.

The UAE also stressed the importance of maintaining flexible legislative systems for consumer protection to facilitate the provision of new financial channels capable of reaching people outside the financial system in developing countries, as well as ” accelerate innovation in financial technology. In addition, the UAE highlighted the need for effective partnerships with the private sector, due to their positive impact on improving financial flexibility and increasing the level of digital financial inclusion.

At the end of the meeting, participants reviewed progress on reports being prepared by GPFI this year, with an agreement to continue providing support until the reports are completed. Additionally, members agreed to continue to provide support as the reports progress. The final version of the GPFI reports are expected to be delivered before the third and final GPFI meeting of the year, October 4, 2021. Meanwhile, global financial leaders will approve an agreement on July 9 and 10 setting a global minimum corporate tax. and will call for technical work to be completed so they can approve the implementation framework in October, their draft statement said.

“After many years of discussions and on the basis of the progress made last year, we have reached a historic agreement on a new fair and stable international tax architecture,” the project says.

He made no mention of a specific rate for a global minimum corporate tax or other key details, which have yet to be agreed by nearly 140 countries known as the inclusive framework meeting online this week. next in talks organized by the Organization for Economic Cooperation and Development.

Details agreed at that meeting will then be sent to finance ministers and central bank governors of the world’s 20 largest economies (G20) for approval at the July 9-10 meeting in Venice.

“We endorse the core elements of the two pillars on Multinational Profit Reallocation and the Global Minimum Tax, as set out in the statement issued by the G20 / OECD Inclusive Framework on Base Erosion. Taxation and Profit Shifting (BEPS), ”the G20 project said ahead of next week’s talks. The first “pillar” of the OECD agreement is to ensure that international companies, in particular digital giants like Google, Amazon, Facebook, Apple or Microsoft, pay taxes in the countries where they make a profit, rather than in low-tax jurisdictions chosen to minimize tax payments.

The second “pillar” is a minimum level of corporate tax globally so that governments do not compete with each other by lowering taxes to attract investment from large multinationals.

G7 finance ministers earlier this month backed a global minimum tax rate of at least 15% and thresholds to divide governments’ rights to tax profits from cross-border trade, but the G20 plan does not makes no reference to that number. “We call on the inclusive G20 / OECD framework on BEPS to quickly finalize the remaining technical work with a view to approving the framework for implementing the two pillars by our next meeting in October,” said the draft, seen by Reuters.

Intense bilateral discussions are currently underway ahead of talks organized by the OECD to put countries on the same wavelength in the face of strong resistance from low-tax countries, including Ireland, the Netherlands, Hungary and Luxembourg.

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