FM emphasises on consensus-based solution for digital taxation at G-20 meet

Amid the controversy sparked off by digital tax at the global level, Finance Minister Nirmala Sitharaman said the solution for the issue should have a consensus and should be simple, inclusive, and based on robust economic impact assessment.

Sitharaman was speaking at the G-20 finance ministers and central bank governors meeting through video conferencing.

The digital taxation assumed significance since the US launched an investigation against various countries including India for levying digital tax on its companies.

The finance minister also spoke about the pro-cyclicality of rating downgrades by the credit rating agencies and its deterrent impact on policy options, particularly for emerging market economies.

Sitharaman, in the first session of the meeting, talked about the G20 Action Plan in response to Covid-19, which was endorsed by the grouping in its previous meeting in April. The plan lays out a list of collective commitments under the pillars of health response, economic response, strong and sustainable recovery and international financial coordination, aimed at coordinating G20 efforts to fight the pandemic.

She highlighted the need for international coordination required in addressing the spill-over effects of exit strategies.

Emphasising that the action plan needs to reflect how the economies are balancing their supply-side and demand-side measures in response to coronavirus, Sitharaman shared with her counterparts how India is working on ensuring this balance through credit schemes for greater liquidity, direct benefit transfers, and employment guarantee schemes.