Cormoros finance minister Said Ali Chayhane, Nirmala Sitharaman, Germany's finance minister Olaf Scholz and Ja... Read More

MUMBAI: Finance ministers of G20 countries have reaffirmed their full support for a consensus-based solution for taxing the digital economy . The target is to define broad contours of a unified taxation framework by end of next year.

As reported by TOI earlier, the draft Secretariat Proposal released by the Organisation for Economic Co-operation and Development had called for re-allocation of a part of the profits of highly digitised companies and giving taxing rights to countries where its customers were located.

Under this approach, multinational enterprises, like Google, Facebook and Amazon, which have a huge consumer base in several countries but no physical presence, would have to retain some portion of their profits in those countries.

The stakes are high for India, which has a significant digital customer base.

In a press statement, the G20 ministers stated: "We reaffirm our full support for a consensus based solution with a final report to be delivered by end of 2020.

With a view to meeting this ambitious timeline, we stress the importance of the Inclusive Framework agreeing to the outlines of the architecture by January 2020." India's finance minister Nirmala Sitharaman said a unified approach to the nexus and profit allocation challenges is a promising one that merits serious attention. A government press release quotes her as saying, "A solution that is simple to implement, simple to administer and simple to comply with is needed."

Sitharaman had led the Indian delegation to the Annual Meetings Plenary session of the International Monetary Fund and the World Bank Group held in Washington this week.

