The head of the International Monetary Fund enjoys a tax-free income of £350,000, it has emerged days after she attacked Greeks for failing to pay their taxes.
Christine Lagarde provoked a furious backlash after blaming Greece’ economic plight on citizens ‘who are trying to escape tax all the time’.
Now it has been revealed that the divorced Frenchwoman, 56, 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.
Greek-born economist Vicky Pryce said many people in her home country were astonished by Lagarde’s hypocrisy.
“There has been a lot of comment about the irony of the situation,” she said.
She added that Lagarde had not grasped the true nature of the problems facing the eurozone.
“If people paid the tax they were due to pay it would make hardly any difference,” she said.
Tax expert Richard Murphy said Lagarde’s comments were “so insensitive”.
“How can someone who is living tax-free, way beyond the means of the Greek parent who can’t feed their children, say tough, you’re living in austerity, you’ve got to keep us happy,” he asked.
He said many Greeks are now withholding their taxes as they believe the country is being run by the IMF instead of an elected government.
A spokesman for the IMF said Lagarde “pays all taxes levied on her, including local and property taxes in the US and France”, adding: “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.”
At the weekend Lagarde suggested Greece only had itself to blame for its financial situation.
She said Greeks could “help themselves collectively” by paying their taxes.
“I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education because I think they need even more help than the people in Athens,” she added.
Asked if Greeks were experiencing payback for years of bad practices, she said: “That’s right.”
She later sought to clarify her remarks, insisting she had been largely referring to the wealthy.
The hurried explanation came after a furious response in Greece, criticism from French politicians and a stream of abuse on her Facebook page.
Addressing critics on the social network, she said she was â “very sympathetic to the Greek people and the challenges they are facing”.
“That’s why the IMF is supporting Greece in its endeavour to overcome the current crisis,” she added.
“An important part of this effort is that everyone should carry their fair share of the burden, especially the most privileged and especially in terms of paying their taxes.” - Daily Mail