Portugal open to super-rich tax idea, but awaits clearer outlines

The foreign minister said Portugal was open to the idea of ​​Brazil’s G20 presidency to create a global tax on the super-rich, but stressed that the contours of its implementation had yet to be determined.

“A tax on the super-rich is something that deserves to be studied and considered, something we are open to,” Paulo Rangel told reporters at the end of a meeting of the G20 Task Force on the Global Alliance Against Hunger and Poverty in Rio de Janeiro led by Brazilian President Luiz Inacio Lula da Silva.

Despite this, the Portuguese minister stressed, “its contours have not yet been fully defined.”

According to the head of diplomacy of Portugal, a country invited by Brazil as an observer member of the G20 this year, it is necessary to first “agree on the conditions under which a contribution of this type can be established and what is the universe of its application, so that it can be collected and regulated.”

“Since we are talking about a global stake, how can this be implemented in practice,” he stressed, and that is why the Portuguese government does not have “a closed position on this issue, in the sense of saying: ‘Let’s go ahead now’.”

Brazil, which holds the rotating presidency of the Group of 20 major economies (G-20) until the end of November, commissioned the report and hopes to get as much support as possible at a financial summit of the group’s ministers and central bank presidents that will take place from Thursday to Friday in the Brazilian city of Rio de Janeiro.

The report’s findings suggest that a 2% minimum tax on billionaires would be the most appropriate option to restore tax progressivity worldwide and raise more than $250 billion (€230.9 billion at current exchange rates) per year.

According to the European Union Tax Observatory, there are fewer than 3,000 billionaires in the world.

On Wednesday, the Brazilian government proposed a tax on the super-rich to finance projects of the Global Alliance against Hunger and Poverty, an initiative of the Brazilian president presented this Thursday in Rio de Janeiro by the G20.

According to Paulo Rangel, if such a tax exists, it should be aimed at “global humanitarian goals, it should benefit the most vulnerable segments of the population.”

This is the easiest question to solve, “the most difficult question is the question of building, defining the exact contours in order to create a global consensus.”

Because, he stressed, such a tax “has to have a lot of international support, because if it’s just half a dozen countries, it won’t work.”

Otherwise, we will find that the richest “flee to those countries that will be happy to attract them because they will levy much lower taxes.”

This was one of the questions Portugal asked when the idea of ​​importing money for the super-rich arose.

“Whether or not we are moving towards such a regime, there are many issues that could address some of the problems of inequality and tax injustice at the global level, namely the problem of those far-reaching conditions that have not been resolved,” Paulo Rangel stressed.

In conclusion, the person in charge assured that “Portugal is clearly open to this idea”, but that “before that, a series of efforts must be made that have already solved many problems”.

In an interview with Lusa, economist Quentin Parriniello, one of the authors of the report to be presented to those responsible for finance and central banks at the G20, believes that taxing the super-rich is a question of “the survival of democracy”.

The policy director of the European Union’s Tax Observatory said the proposal was not only about “raising revenue but also a way to restore trust with governments.”