Coronavirus: IMF recommends taxing the rich to deal with the crisis

The International Monetary Fund (IMF) on Wednesday recommended to countries impacted by the repercussions of the coronavirus pandemic, to increase taxes on the rich and the companies that made more profits during the pandemic so that they can continue to help the poorest people. most affected by the crisis.

For those countries which still need financial assistance to face the economic crisis caused by the covid-19 pandemic, it is “necessary to mobilize additional tax revenues”, said Paolo Mauro, one of the budgetary affairs officers. at the IMF at a press conference.

And for that to happen, governments need to put in place solutions to try to balance the deep inequalities between rich and poor, and use the resources withdrawn to revitalize key sectors, such as health, education and social Security.

“The pandemic has increased inequalities, and governments have had to provide significant financial support” to the hardest hit people and businesses, added the IMF official;

This is why the financial body recommends setting up a higher tax system for the rich and for companies that made great profits during the pandemic, on a temporary basis to continue to face the crisis.

This recommendation of the IMF was already mentioned last October, and it manifests itself once again by taking note of an “erosion of the taxation of personal income for people at the top of the income scale”.

Affirming that there are several other options that will allow governments to help their economies, the IMF cited as an example the elimination of tax loopholes, the increase in property taxes or even inheritance taxes.

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On Wednesday, the group of the world’s 20 leading powers, the G20, called on the IMF to increase aid to the most vulnerable countries hit by the pandemic, in the form of a new issuance of Special Drawing Rights (SDRs) d ‘an amount of $ 650 billion, said a statement from finance ministers and central bankers of G20 countries, following a virtual meeting chaired by Italy.

The G20 has also decided to extend the initiative to suspend the debt service of the most vulnerable countries until the end of 2021 ″, six more months, while noting that this will be the last extension.

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