During the meeting on May 12-13 in Italy, G7 finance ministers and central bank governors expressed the need to address the tax challenges associated with the digitalization of the economy. During the event, U.S. Treasury Secretary Steven Mnuchin defended the Trump protectionist tax plan.
U.S. Treasury Secretary Steven Mnuchin briefed his counterparts on the Trump tax plan to cut taxes and decrease regulatory burdens for multinationals. Mnuchin said that the US doesn’t want to be "protectionist" but it reserves rights to be protectionist to the extent to which "trade is not free and fair.” “We want to have balanced trade. We believe in free trade, but we do have large imbalances and we have had very productive discussions with our counter parts," he said.
During the G20 meeting in Germany last month, the ministers addressed the urgency to tackle taxation of the digital economy, which is today worth 10% of GDP and growing rapidly.“The web tax is taking shape,” said Economy Minister of Italy, Pier Carlo Padoan, before starting the work of the official session with other ministers.
In their communiqué, the G7 ministers said they recognized the importance of monitoring and evaluating the developments related to the digitalization of the economy, and, depending on the conclusions of the work by the OECD Task Force on the Digital Economy (TFDE), developing policy options, as appropriate, to address related tax challenges with a consistent approach. In this context, we look forward to the interim report of the OECD TFDE in 2018.
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