02:07 GMT +3 hours30 May 2016
Live
International Monetary Fund (IMF) Managing Director Christine Lagarde attends the session Where Is the Chinese Economy Heading? of the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland in this January 21, 2016 file photo

Wind of Change: IMF Chief Calls For New International Taxation System

© REUTERS/ Ruben Sprich/Files
Business
Get short URL
457011

Governments globally should take steps to adjust taxation systems to close loopholes allowing multinational corporations to avoid paying taxes in countries of their origin, International Monetary Fund (IMF) Managing Director Christine Lagarde said on Monday.

WASHINGTON (Sputnik) — The IMF chief said taxation allows governments to mobilize their revenues. She noted, however, that the process can be undermined by "overly aggressive tax competition" among countries, and companies abusing the system of international taxation.

"We need a tax system in which ordinary citizens are convinced that multinational companies and wealthy individuals are contributing a fair share to the public purse, to the common good," Lagarde stated at a conference in Abu Dhabi, the United Arab Emirates.

Wealthy individuals try to avoid taxes, Lagarde explained, and move assets to offshore locations. She argued that the automatic exchange of taxpayer information among governments could make it harder for businesses to follow the scheme.

The IMF chief noted that higher revenues stemming from closed loopholes will create more fiscal room, particularly for oil-exporting countries that have been hit by falling commodity prices.

"The size and likely persistence of this external shock means that all oil exporters will have to adjust by reducing spending and increasing revenue," Lagarde concluded.

IMF estimates show that developing economies lose up to 1.3 percent of their GDP in tax revenues due to inadequacy of the existing system.

Related:
Lagarde's Term as IMF Chief to Be Extended for Five Years on Friday
IMF to Approve More Funds for Ukraine After Gov't Survives Parliament Vote
Fears of Grexit Grow as IMF and EU Fall Out Over Bailout Program
Tags:
International Monetary Fund, taxation, Christine Lagarde
Community standardsDiscussion
Comment via FacebookComment via Sputnik
  • Сomment

All comments

  • anne00marie
    ????? What is happening to the IMF? I thought it was controlled by the globalised corporates?
  • Randall Lee Hilburn
    The IMF is run by Washington, and one of the main ones responsible for the mess the worlds economy is in. Does anyone trust these people?
  • Randall Lee Hilburn in reply toanne00marie(Show commentHide comment)
    anne00marie, Oh, it most assuredly is! That's another reason why I don't trust them.
  • yehedgehog
    Taxation is theft by force, international tax is theft by fraud! What does the world get from the IMF? The right to borrow stolen money, to be repaid at usurious rates of interest! Arrest and execute these monetary terrorists!
Show new comments (0)
Top stories