Making tax administrations more efficient

Wolfgang Schäuble calls for structural reforms in all countries to make them more competitive Photo: Bundesregierung/Bergmann

Businesses with global operations exploit the different legal systems in place in different countries to minimise their own tax bill. Consultancy companies demonstrate a remarkable level of creativity in helping them do so, declared Federal Finance Minister Wolfgang Schäuble. The logical consequence for national level is that the effective tax administration at federal and state level must become even more efficient. And the same is true globally, at G20 level.

Thwarting tax avoidance strategies

One priority of the German Presidency will be to forge ahead rigorously with global efforts to prevent tax avoidance and tax reduction. This is a field that is, however, much more complicated than many people realise. Wolfgang Schäuble warned against raising unrealistic expectations. "It is not realistic to think that we can simply bang our fist on the table and that 200 United Nations member states will then pass the pertinent regulations. Making progress is a much slower and more painstaking process."

Wolfgang Schäuble reminded his audience of Germany’s role as a trailblazer at global level, and announced that this role would be reinforced during Germany’s Presidency. We must not forget the lessons learned during the financial and banking crisis. Naturally over-regulation also exists. That is always the case. "But the main concern, which is to make financial markets more resistant to crises, especially in this era of globalisation" is a vitally important task and one that the German G20 Presidency will be addressing, he said.

Spotlight on Africa

The G20 Presidency will also, he reported, and this is the third priority area, be focusing the attention of the international community more on Africa.

Keeping Europe on course, enhancing competitiveness

Germany must do its work and also ensure that Europe as a whole stays on course. The German people have already demonstrated their overwhelming solidarity. "But in Europe we must ensure that Germany’s efforts are also used to solve the problems facing Europe," warned Wolfgang Schäuble.

All countries must implement structural reforms to make them more competitive, he said, pointing to the international consensus on this point. "What we do not have in the world, is any lack of debt. What we do not have in the world, is a lack of central bank liquidity. But what we do have in the world, is a lack of competitiveness because many countries have failed to implement the necessary reforms."

Creating incentives through structural reforms

Against the background of critical global developments, Federal Finance Minister Wolfgang Schäuble stressed that the German G20 Presidency will continue to press for structural reforms. It is a question of strengthening resilience to potential critical development, and he closed with a timely reminder that, "This presupposes that we in Germany retain our own efficiency and ability to act."

Thursday, 1 December 2016

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