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G20 finance chiefs back tax deal, pledge to sustain recovery, watch inflation By Reuters

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© Reuters. G20 flags are displayed outside of the G20 venue, just before the G20 Summit for major world economies begins in Cannes on November 3rd 2011. REUTERS/Dylan Martinez/Files

WASHINGTON, (Reuters) – Finance ministers from G20 countries on Wednesday endorsed a global agreement to overhaul corporate taxation. They also pledged not to withdraw fiscal support prematurely and to keep an eye on inflation.

G20 finance ministers, central bank governors, and the International Monetary Fund were also asked to set up a trust fund for a $650 million issuance IMF monetary reserves. This would allow them to reach a wider range of countries that are more at risk.

The statement was made by the G20 finance chiefs. They stated that they would continue to support the recovery and avoid any premature withdrawals of support measures. However, financial stability, long-term fiscal sustainability and protection against negative spillovers and downside risks will be maintained.

The leaders stated that the central banks “monitoring current price dynamics closely” in light of rising inflation caused by shortages and supply chain bottlenecks.

The G20 communiqué stated that they would “act as necessary to fulfill their mandates, which include price stability and looking at inflation pressures when they are temporary, while remaining committed to clear communication about policy stances.”

They pledged that they would work together to overcome shortages in tools and therapies to counter the COVID-19 pandemics in low and middle income countries over the next few months.

G20 finance chiefs are in Washington to attend the IMF/World Bank annual meetings. This comes just days following 136 countries adopted a 15% minimum corporate income tax.

G20 leaders endorsed OECD’s tax agreement. They called for the rapid development of “model rules” that would guide the implementation by countries and ensure “that the new rules are in effect globally by 2023.”

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