Climate finance and corporate tax reform will be litmus test for success in Lima finance meetings 

Ministers must deliver on their climate finance promises and support a second wave of attack on corporate tax cheats if their Lima meeting is to succeed, said Oxfam today. Peru will host G20 Finance Ministers on 8 October and the annual meetings of the IMF and World Bank from 9 – 11 October.

Tax and inequality

The World Bank and IMF have made inequality a key theme of their annual meeting in Latin America – the world’s most unequal region – where one percent of the population owns 41 percent of the wealth. 

G20 Finance Ministers are also expected to endorse an OECD package of reforms to the global tax system that aims to tackle aggressive tax avoidance by multinational companies. 

Winnie Byanyima, Executive Director of Oxfam International, said: “Corporate tax dodgers deprive Latin America of half its potential tax revenue. This is immoral and unsustainable. Finance Ministers must crack down on them if they are serious about tackling poverty and inequality.

“G20 Ministers, the IMF and the World Bank must move beyond the current disappointing package of reforms and support a second generation of deeper tax reform. They must include all countries on an equal footing to make the global tax system work in the interest of the majority – not the vested interests of the few.

Climate finance

With a new deal on climate change set to be agreed in Paris in just a few weeks’ time, finance ministers will also establish what progress has been made on their promise to mobilize $100 billion in climate finance per year by 2020. They will also set out how they will close the remaining finance gap. 

Oxfam is concerned that, despite significant new funds being pledged in recent months, donor governments will overstate how much progress they have made toward the $100 billion and that the money available for adaptation remains well below what is needed. Since 2009, adaptation has received less than 20 per cent of international climate finance. Oxfam estimates that only around $2.5 - 4.2 billion is currently flowing per year.

Byanyima said: “If Finance Ministers can maintain this year’s momentum on climate finance they can bring a strong climate deal one step closer. The responsibility sits on their shoulders to ensure the world’s poorest and most vulnerable people are not left to cope alone. 

“Ministers must give an unvarnished account of exactly how much of the $100 billion a year they have mobilized to date – and set out a credible plan for how they will mobilize the rest of the money by 2020. Half of this money must be used to help poor people cope with climate change – and most of the adaptation finance must come from public funds”.