In a historic stride, the AU attains full membership in the G20 intergovernmental forum, a development announced at the G20 Summit in New Delhi, giving the Global South more voice and unity.



In a seminal move for global economic and diplomatic progress, the African Union (AU) has officially been admitted to the G20 intergovernmental forum as a full member, announced this weekend at the 18th G20 Summit, held at the Bharat Mandapam Convention Centre in New Delhi, India.



The AU’s admission comes after historical calls for greater inclusion of the continent, now providing it with equivalent status within the G20 as the European Union, and is expected to provide more compelling representation for Africa on global matters of interest.



 The proposal for the AU’s full membership came in part at the hands of Indian Prime Minister Narendra Modi’s broader effort to increase representation on major global challenges by the Global South, reflected in his remarks on the opening of this weekend’s summit: “India&#8217;s G20 presidency has become a symbol of inclusion, both within the country and beyond… It was in the spirit of &#8216;Sabka Saath&#8217; that India proposed permanent membership for the African Union in the G20. I believe that we all agree on this proposal.”



The Chairperson of the AU Commission Moussa Faki Mahamat welcomed the admission of the AU in a message posted on X, a sentiment reflected by the leaders of many African leaders. “This membership, for which we have long been advocating, will provide a propitious framework for amplifying advocacy in favour of the continent&#8230;”



The G20 represents some of the largest countries and economies in the world, providing a platform of common purpose and collaboration on many global issues, including financial markets, trade regulations, and of ever-increasing importance – climate change.



The addition of the AU allows for representation for its 55 member states and their collective population of over a billion to play a more direct role in the decisions made by the G20 bloc. As a member, this also means that an AU member state will be able to chair the summit as this occurs on a rotational basis.



South Africa will assume the G20 Presidency in 2025.



In focus at this year’s summit hosted by India was the need for G20 member nations to increase collaboration and efforts to reduce the impact of climate change, prescient as these are increasingly being felt worldwide, particularly by those most vulnerable, many of which are part of the AU. South African President Cyril Ramaphosa in his own celebration of the AU’s membership, made it clear in a statement this morning that “the achievement of the Sustainable Development Goals (SDGs) must remain at the centre of international financing discussions to ensure that finance is mobilised in sufficient quantities and of suitable quality to support development in low- and middle-income countries.”



The ability of the African continent to have a voice in shaping climate and fiscal policy of the bloc in the future is likely to have resounding benefits, with negotiations more likely to bring economic, diplomatic and climate-related advantages to AU members moving forward.

G20 Summit in Indonesia

African Union’s G20 Membership: Boosting The Continent’s Global Influence

From the rapprochement between North and South Korea at the Winter Olympics in January to December’s frantic news agenda, 2018 has had no shortage of surprises. Below are my key picks for the defining moments of the year. 



Elon Musk, Mars, and a roller coaster year for billionaires



On Feb. 6, Elon Musk’s Falcon Heavy rocket&nbsp;<a href="https://www.reuters.com/article/us-apps-space-commentary/commentary-spacex-launch-opens-new-frontier-in-space-commerce-idUSKBN1FQ38W">blasted into space</a>&nbsp;from Florida and sent a cherry-red Tesla roadster hurtling toward Mars. It was a powerful statement about the influence and ambition of a new generation of tech billionaires.



Overall, however, 2018 would be a rough year for the group, and Musk was no exception. By July, he was&nbsp;<a href="https://uk.reuters.com/article/us-tesla-ceo/tesla-shares-fall-after-ceo-musk-abuses-british-caver-idUKKBN1K62H7">embroiled in a high-profile spat</a>&nbsp;with a British cave rescue diver over a miniature submarine he had hoped would help rescue 12 boys trapped underground in Thailand, just one of a series of&nbsp;<a href="https://www.theguardian.com/technology/2018/aug/19/elon-musk-tesla-timeline-difficult-painful-year">increasingly negative headlines</a>.



Facebook founder Mark Zuckerberg – once touted as a potential U.S. presidential candidate – had scarcely a better year, his firm plagued by its own stream of&nbsp;<a href="https://www.recode.net/2018/11/15/18097064/facebook-political-reaction-new-york-times-capitol-hill">scandals and political headwinds</a>.



Google, whose chief executive Sundar Pichai became the latest tech chief&nbsp;<a href="https://www.recode.net/2018/12/11/18134984/live-google-ceo-congress-hearing-china-testimony-house-judiciary-committee-censored-search">summoned before Congress</a>, faces a mutiny from some workers on multiple topics, including his dealings with the U.S. and Chinese governments. Amazon founder Jeff Bezos&nbsp;<a href="https://www.theguardian.com/commentisfree/2018/sep/14/jeff-bezos-low-income-people-pay-amazon-workers-better">faces mounting criticism</a>&nbsp;over working conditions and low tax payments.



Yet none of this looks set to stop tech firms from continuing to radically disrupt the world – indeed, many of their founders appear to believe their mission is to do so. Expect these battles to grow in 2019, particularly if new technology such as artificial intelligence and driverless cars accelerate change.



Trump fires advisers, tightens his grip



One billionaire learning his way around the political system in 2018 was U.S. President Donald Trump. After reports of growing frustration with some of his most senior officials, March saw him fire Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster. Both had been viewed as moderating influences on Trump, with successors Mike Pompeo and John Bolton&nbsp;<a href="https://www.reuters.com/article/us-apps-bolton-commentary/commentary-with-bolton-trump-shakes-off-generals-restraints-idUSKBN1GZ2W4">perceived as less prone</a>&nbsp;to questioning him.



<a href="https://uk.reuters.com/news/picture/john-kelly-to-leave-white-house-idUKRTX6HPZZ">December&#8217;s departure</a>&nbsp;of White House Chief of Staff John Kelly leaves Defense Secretary James Mattis the key restraining influence.



Overall, Trump seems increasingly keen to trust his own judgment rather than that of establishment-based gatekeepers or Republican insiders.



POTUS woos Kim and Putin. Elsewhere, diplomacy unravels.



In Singapore in June and in Helsinki in July, Trump upset many in his own administration with the warmth of his meetings with North Korean leader Kim Jong Un and Russian President Vladimir Putin. The friendliness of the summits stood in stark contrast to the G7 gathering of Western and Allied leaders in Canada, also in June. There, Trump appeared&nbsp;<a href="https://www.reuters.com/article/us-g7-summit/trump-torpedoes-g7-effort-to-ease-trade-spat-threatens-auto-tariffs-idUSKCN1J50H3">more isolated than ever before</a>&nbsp;on topics including climate change, protectionism and relations with Russia. The G7 leaders were unable to agree on a communiqué, with the six non-U.S. members making their own statement independent of Washington.



Events at the G7 pointed to a wider malaise in international diplomacy. World leaders at November’s Asia-Pacific Economic Cooperation summit in Papua New Guinea&nbsp;<a href="https://www.reuters.com/article/us-apps-china-commentary/commentary-can-u-s-china-relations-be-saved-idUSKCN1NO2EJ">also failed to agree</a>&nbsp;on a communiqué, this time due to divisions between China and the United States and its allies over trade.



Military posturing is also on the rise. Russia, China and NATO&nbsp;<a href="https://www.reuters.com/article/us-apps-wargames-commentary/commentary-why-china-and-russia-are-obsessed-with-vast-new-war-games-idUSKCN1LE1O6">each held their largest wargames</a>&nbsp;in recent history this summer, while confrontations between jets and warships in the South China Sea and Europe have also increased markedly.



Khashoggi killed as authoritarian states take the gloves off



The world’s authoritarian states appeared at least equally as focused on stifling dissent and opposition. Nowhere was that clearer than in the case of Saudi journalist Jamal Khashoggi, who was&nbsp;<a href="https://www.reuters.com/article/uk-saudi-khashoggi-adviser-insight/how-the-man-behind-khashoggi-murder-ran-the-killing-via-skype-idUKKCN1MW2H4">murdered and reportedly dismembered</a>&nbsp;in his own country’s consulate building in Istanbul. Like the suspected Russian nerve agent assassination attempt on a former double agent in the UK town of Salisbury the previous year, the killing sparked international outrage and some diplomatic isolation of Riyadh – but little in the way of convincing apology from those believed responsible.



A string of autocratic governments appear increasingly dismissive of human rights, openly taking draconian action against critics and enemies alike. Russia is continuing its ruthless military campaign against remaining rebel enclaves in Syria, and a Saudi-led coalition has persisted in its war in Yemen – at catastrophic cost to civilians, where millions now face starvation.



China is cracking down on its Muslim Uighur minority, with a U.N. report&nbsp;<a href="https://www.reuters.com/article/us-china-rights-un/u-n-calls-on-china-to-free-uighurs-from-re-education-camps-idUSKCN1LF1D6">citing estimates Beijing has</a>&nbsp;interned up to one million in “reeducation camps.” Such steps suggest authoritarian rulers like China’s Xi Jinping and Russia’s Putin may not feel as secure as they appear – or that they believe such brutal tactics are simply necessary to retain their grip.U.S. President Donald Trump and North Korea&#8217;s leader Kim Jong Un leave after signing documents that acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst



G20 meets as Paris burns



November’s G20 gathering in Argentina was&nbsp;<a href="https://www.reuters.com/article/us-apps-g20-commentary/commentary-for-g20-leaders-greater-problems-yet-to-come-idUSKBN1O22FW">perhaps the year’s most successful</a>&nbsp;multilateral gathering, with world leaders managing to agree on a largely bland communiqué on reform of global trade. Trump’s meeting with China’s Xi brought some temporary relief from the two countries’ trade war, even as Ukraine tensions and Mueller’s Russia probe made a Trump-Putin meeting impossible. There was still no shortage of disagreements on show, however – and as the leaders met, riots in Paris were grabbing global headlines.



Almost every Western leader in Argentina returned home to an existential political crisis. French President Emmanuel Macron has since bowed to some of the demands of the “yellow vest” protesters, particularly over fuel tax, but that has not been enough to stem the unrest. German Chancellor Angela Merkel has signaled she will shortly leave politics, although she has seen some success in appointing a protegé to lead her party. Trump went back to Washington to face the fallout from former lawyer Michael Cohen’s admission of&nbsp;<a href="https://www.cbc.ca/news/world/cohen-new-charge-trump-1.4925270">lying to Congress</a>&nbsp;about a Trump Tower project in Moscow; British Prime Minister Theresa May has so far failed to find a Brexit deal she can get through Parliament.



Many of these impasses stem from a much wider crisis in Western nations, with rising wealth gaps and often mounting discontent and hardship among the poorest. Solving those issues will be tough – and more disruption feels inevitable through 2019 and beyond. &#8211; Reuters



<ul><li>Peter Apps </li></ul>

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Commentary | Five Moments That Defined 2018

Governments all over the world lose billions in revenue from corporate tax evasion every year. In many instances, citizens in a country pay a proportionally higher rate of tax than multibillion dollar companies.
Despite this being a global pandemic, Africa suffers more than most.
While delivering his Nelson Mandela lecture in Johannesburg, Sudanese-British mobile communications entrepreneur and billionaire, Mo Ibrahim, said more money is lost from multinationals not paying tax, through what he calls fancy accounting, than gained from aid.
“Physics and numbers don’t lie, but people do,” he says.
The continent is blessed with resources: Oil in Nigeria; gas and mineral reserves in Botswana; Angola, Ghana, and South Africa; the Democratic Republic of Congo has diamonds and cobalt; Mozambique has natural gas. These resources alone could lift millions of Africans out of poverty.
Former United Nations secretary general, Kofi Annan, wrote that the continent loses a huge amount of money from the use of shell corporations, offshore companies and tax havens by multinationals which often divert their profits.
But Dylan Buttrick, an associate at Norton Rose Fulbright South Africa begs to differ—slightly.
“It is important to understand the distinction between aggressive structures that facilitate tax evasion, and corporations that have tax efficient structures as a result of tax planning. In a world of increased globalization and multinationals, offshore structuring and tax planning is to be expected and remains legitimate,” says Buttrick.
The lack of infrastructure and resources makes it difficult for tax authorities to track payments. Revenue authorities would benefit from more sophisticated collection systems and processes that would help these authorities in enforcing compliance.
According to The Elders, an independent group of global leaders, transfer pricing—the practise of shifting profits to lower tax jurisdictions—cost Africa $38.4 billion every year, a number which Buttrick says is difficult, if not impossible, to quantify.
He says in recent years, African authorities have increased their focus on compliance with transfer pricing.
Buttrick further says the practise in the market is to ensure that transfer pricing policies comply with the South African tax laws, this despite significant chances in recent times, leading to a perceived uncertainty in some circles.
“Most multinationals do not indulge in invasion, i.e. fraudulent reduction of their tax, but may reduce their taxes in a particular jurisdiction through the use of legitimate tax planning tools, but beyond what certain politicians or even the public may deem appropriate,” says Buttrick.
Buttrick says from an exchange control perspective, South Africa’s banking and reporting system is fairly sophisticated and cross-border payments are easily monitored. The inflow and outflow of capital from the country will need to comply with exchange control regulations.
The G20 plans to fight international tax evasion by multinational companies. They will exchange tax information and support the Organisation for Economic Cooperation and Development (OECD) in its plans to prevent multinational companies from avoiding tax by moving profits across borders. The new rules would force companies to pay tax in the countries where they make their money, instead of where the tax rate is the lowest.
Companies like Google, Apple, Amazon and Starbucks are reported to have perfected the art of using loopholes within tax regulations. MercoPress reports that these firms argue that they are doing nothing illegal and have a duty to shareholders to minimize tax payments to maximize profits.
The OECD says that some of the existing tax rules, created in the 1920s, were designed to avoid double taxation of companies operating in more than one country. But this is haunting the industry nearly a century later as these same rules are being used to create double non-taxation.
The G20 leaders agreed to an unprecedented deal to share information on individual taxpayers. They plan to start exchanging information on tax matters among G20 members by the end of 2015.
David Cameron, the British prime minister, says the new tax rules state that only advanced nations will sign on the deal, but it’s important that developing countries participate in sharing tax regulations.
Reforming the outdated global tax framework needs to occur, with governments across the globe working together. Regardless, one question still bothers me: should multinationals be taxed on the basis of where they are doing business or on the strength or weakness of their lawyers?

Tag: G20

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African Union’s G20 Membership: Boosting The Continent’s Global Influence

Commentary | Five Moments That Defined 2018

“Numbers Don’t Lie But People Do”