Spain and Brazil present an initiative to push for higher global taxation of super-rich people

Spain and Brazil have presented a joint initiative in the framework of the 4th International Conference on Financing for Development of the UN, which is being held in Seville, to promote greater global taxation of super-rich people. The aim of this proposal is to contribute to a greater redistribution of wealth to address the growing problem of inequality. To this end, a multilateral debate on more effective taxation of high-net-worth individuals needs to be promoted to ensure social cohesion in each country. This initiative aims to deepen one of the commitments contained in the "Seville Consensus" and ratified by 192 countries.

Specifically, the Spanish and Brazilian proposal is presented under the title 'Effective taxation of high-net-worth individuals. Taxing the super-rich'. This is an initiative led by First Vice-President of the Government and Minister for Finance, María Jesús Montero, Spanish Minister for Treasury, Carlos Cuerpo, and Brazilian Minister for Treasury, Fernando Haddad, and aims to promote an international debate to guarantee progressivity and efficiency in all tax systems, with the objective of reducing social inequality in the world. The focus is on the taxation of high-net-worth individuals.

Seville Platform for Action

The initiative was presented in Seville by the Secretary of State for Finance, Jesús Gascón, and by the Minister Counsellor of the Permanent Mission of Brazil to the UN, José Scandiucci, and is part of the so-called Seville Platform for Action, a collaboration tool launched at this conference, which is being held in the Andalusian capital, so that countries can launch voluntary initiatives to promote the fulfilment of the Sustainable Development Goals.

The proposal put forward by Spain and Brazil is based on the need to tackle the problem of extreme inequality and achieve a greater redistribution of wealth through a progressive and fair tax system where those who have the most pay the most. In this regard, the text of the initiative reminds that the richest 1% of the world's population currently owns more wealth than 95% of humanity.

In this regard, it is worth recalling that at the G20 leaders' meeting in 2024 in Rio de Janeiro, Brazil, a collective and historic agreement was reached for the first time to cooperate on the implementation of an effective tax agenda for high net worth individuals. The Spanish-Brazilian proposal therefore follows the path laid out by the G20 and seeks to deepen this agreement.

Effects of inequality

The statement submitted by Spain and Brazil argues that if no action is taken, "extreme inequality will continue to rise, undermining growth, sustainability, and public confidence in democracy". One of the causes of this growing inequality is the low contribution of high-net-worth individuals, who often enjoy significantly lower effective tax rates than the average worker or citizen.

To remedy this situation, the proposal aims to encourage and guide different countries to join the initiative and address policy and administrative and data gaps, and ensure that high-net-worth individuals are taxed more efficiently according to their wealth. This requires international cooperation in multilateral fora to promote and facilitate the implementation of evidence-based reforms and ongoing experiences on the taxation of large fortunes in different countries.

To fight inequality, it is essential to have information that allows for a detailed diagnosis of the situation at global level. Therefore, one of the objectives of this initiative is to collect data to address this problem as accurately as possible. In this regard, the proposal aims to identify the concentration of wealth in different countries, collect data on effective tax rates in countries, and commission comparable research across countries, including on the fight against inequality and the application of tax progressivity.

International organisations and civil society

To promote this Spanish-Brazilian proposal within the framework of the International Conference on Financing for Development in Seville, it has been agreed to draw up a work plan within three months to promote the initiative. The proposing countries will also meet regularly and at least once a year in face-to-face meetings.

The aim is that more countries will gradually join this initiative and thereby be able to assess the legislative initiatives on the taxation of high-net-worth individuals presented in each territory. This initiative is also open to civil society and international institutions and organisations, as one of its key aims is to strengthen multilateralism and international cooperation.

Non official translation