Christine Lagarde

Remember that Dylan lyric: “Steal a little and they throw you in jail/Steal a lot and they make you king”? That’s kind of how I feel when I read that Christine Lagarde, the head of the International Monetary Fund, earns a R4,6m salary annually – without paying tax on it. This is the very same person who very recently attacked the Greeks for failing to pay their taxes.

Lagarde blamed Greece’s economic plight on citizens “who are trying to escape tax all the time”. She later sought to clarify her remarks, insisting she had been largely referring to the wealthy.

Read the below information regarding her own taxes and then decide if you agree that perhaps we are dealing with a case of the pot calling the kettle black here:

Christine Lagarde earns a salary of £298 926 which her contract states ‘shall be net of income taxes’. Part of this is paid for by British taxpayers, as the UK contributes 4.5 per cent of the IMF’s resources. This equates to about £13,500 of Lagarde’s basic wages. The IMF also pays Lagarde a top-up tax-free sum of £53,490, designed to enable the Fund’s leader to maintain, in the interests of the Fund, a scale of living appropriate to your position as managing director and to the Fund’s need for representation.

In addition, she is entitled to expenses for entertainment and travel and hotel costs for her and her partner when the IMF meets in Washington DC. Her five-year contract also entitles her to a pay increase every July.

When pressed about the issue, the IMF released the following statement:

Lagarde pays all taxes levied on her, including local and property taxes in the US and France. Fund salaries, like those in most international organisations, are paid on a lower, net-of-tax basis to ensure equal pay for equal work regardless of nationality.

[Source: Business Report]