INTRODUCTION & WELCOME 9
Towards strong , sustainable and balanced growth
President of Mexico , Enrique Peña Nieto
The G20 is committed to develop comprehensive strategies to stimulate strong , sustainable , and balanced growth worldwide . To do so , it has played a significant role in enhancing macroeconomic policy coordination among major economies , improving financial regulation and setting the basis for international recovery
In accordance with these purposes , last February , G20 Finance Ministers and Central Bank Governors decided to coordinate efforts in order to lift the Group ’ s GDP . The collective goal is to increase it by more than 2 % over the coming five years , above the implied trajectory by current policies . I am convinced we can achieve this by promoting sound macroeconomic policies and reforms , as well as , fostering investment , trade and competition . For this reason , Mexico embraces the ambitious commitment and looks forward to discussing an action plan , at the Brisbane Summit this November .
In this regard , my country has a renewed capacity to contribute to global growth . Mexicans have started an ambitious transformation agenda that includes structural changes on education , finance , energy , tax collection , economic competition , and telecommunications . These reforms , approved last year thanks to Mexico ’ s main political parties ’ willingness and sense of responsibility , will enhance our competitiveness and development perspectives .
Furthermore , Mexico is taking the necessary steps to unleash its full economic potential . For instance , we have set an unprecedented investment plan in infrastructure . Our National Infrastructure Program will channel almost 600 billion dollars from now to 2018 . Since our country has a privileged geographical location , we are determined to use these resources , to consolidate our position as a high-value added global logistics center .
Our National Infrastructure Program will channel almost 600 billion dollars from now to 2018
Thus , Mexico is excited to co-chair the Infrastructure Investment Working Group , along with Indonesia and Germany . We believe the G20 has the required impulse to foster investment in this sector , promote financing to small and medium enterprises , and further enhance global economic development .
We assume this responsibility as an ideal opportunity to face , as a team , the new challenges of a highly interconnected world .
As one of the most open economies , Mexico fully backs the Australian Presidency initiative to hold a Trade Ministerial Meeting . We should continue strengthening this kind of discussions on G20 summits , as a means to attain more stable economic conditions , and especially , to create new employment sources and better paid jobs for our countries .
One of my administration ’ s priorities is achieving a Prosperous and Inclusive Mexico . In that way , we will continue working on improving employment , food security , and financial inclusion levels , particularly for the most vulnerable people . This is why Mexicans welcome recent efforts to incorporate gender equality into G20 discussions and support parallel events to engage nonstate actors , such as the B20 , L20 , Think 20 , Y20 , and Civil 20 .
I believe Australia is playing a remarkable role as G20 Chair , which will certainly lead us to a successful meeting . We must keep walking firmly towards a suitable environment for strong , sustainable , and balanced economic growth . For this reason , it is a pleasure to attend the upcoming Brisbane Summit and be part of the construction of a better future for our 20 societies . ■
A global tax [r]Evolution
The changing world of tax
Albert Baker, FCPA, FCA
Deloitte Global Leader
Tax Policy
Recent years have witnessed
considerable public anger over
apparently low tax bills paid by certain
companies. As a result the OECD plan
was drawn up to tackle this perceived
tax avoidance by multinationals (Base
Erosion and Profit Shifting (“BEPS”)).
Existing principles of international
taxation were designed before the
globalization of business and the
digital economy. Policy makers are now
recognizing these wider issues, and
recognize that maintaining the status
quo is not an option.
Tax is no longer something limited
to business and tax authority
relationships—it has become a
significant strategic business issue, and
there are also growing demands for tax
information from many non-traditional
sources.
The issue of tax transparency continues
to be part of the global political and
media agenda. It is too early to assess
the impact of all the changes in the
marketplace; however it is highly likely
that most multinationals will be affected.
Identifying risks and opportunities that
current developments bring is critical
and requires regular monitoring and
review of an organization’s position
and options. As the strategic goals
and operations of a business change
over time, so should the tax strategies
adopted to support them.
As part of this global tax [r]Evolution,
there is a perception multinational
businesses are not paying their fair
share of taxes. Responsible tax (e.g.
reputational risk) is now an important
component of international tax matters.
There are three components to this
[r]Evolution: the administration of tax
laws and treaties by jurisdictions (we
see a growing number of instances
of potential double tax where more
than one country is seeking to tax the
same income); unilateral tax law and
treaty changes (we see a growing list of
countries that are enacting or proposing
uncoordinated legislative changes to
protect their tax base, which can lead
to double tax situations); and the OECD
BEPS project.
A survey
The purpose of Deloitte’s “Base Erosion
and Profit Shifting (BEPS) & Responsible
Tax survey,” completed in March 2014,
was to gauge contacts’ views regarding
the increased media, political and activist
group interest in “responsible tax” and
BEPS, and the resulting impact on their
organizations. Nearly 600 Deloitte
contacts responded to the survey.
Tax has become a significant strategic business issue. It can impact an
organization’s competitiveness but can also impact an organization’s
brand and its broader approach to corporate social responsibility.
Ninety-three percent of survey respondents
agreed or strongly agreed that there has been
an increased media and political interest in tax
in their country. Overall, 74% agreed or strongly
agreed that their organization is concerned about
the increased media, political and activist group
interest in tax and 60% have received questions
from their C-Suite and/or Board of Directors about
the increased interest.
Challenges and aspirations
Companies need the certainty of conducting tax
affairs based on laws that are clear and reduce
the risk for tax disputes. This is a rare opportunity
for governments to achieve this on a multi-lateral
basis and in the spirit of cooperation. Of course,
society should not underestimate the challenge
of this given that at least on a short term basis it
is unlikely that all governments will see the same
proportionate increases or decreases in corporate
tax revenues as a result of the BEPS initiative.
Adding to the complexity is that, even in a
post-BEPS world, governments can be expected to
continue to provide economic and tax incentives
in their domestic laws. Many of these incentives
are designed to encourage investment and
increase employment. Also, governments want
to ensure that the tax rules applicable to their
headquartered companies do not put those
companies at a competitive disadvantage relative
to their foreign peers.
Tax has become a significant strategic
business issue. It can impact an organization’s
competitiveness but can also impact an
organization’s brand and its broader approach
to corporate social responsibility. The global
landscape of BEPS, unilateral action by countries
and increased international tax audits, is resulting
in in a global tax [r]Evolution. As such, it needs to
be managed strategically.
Deloitte will continue to contribute to this process,
including continuing to discuss with and make
submissions to the OECD, as well as continuing
the discussion in global and domestic forums.
In our submissions Deloitte strives to represent
the range of businesses we provide services to
and the aim is to shape legislation in a practical
and sustainable way. We will also continue to
advise clients and contacts on developments.
We recommend that multinationals assess the
potential impact of the OECD’s recommendations
on their business.
Information and contacts
For further information, please visit the BEPS
page on Deloitte.com or contact Albert Baker,
Deloitte Global Leader—Tax Policy.
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