Firms that prospered in the pandemic should pay more tax to fund those who still need support, says the IMF
High earners and companies that prospered during the pandemic should pay more tax to fund those who need support, says the International Monetary Fund (IMF).
‘Solidarity’ taxes should be introduced to prevent the divide between rich and poor growing even wider, the watchdog said.
It wants a temporary ‘surcharge’ on high earners’ incomes. And corporation tax could be lifted to milk more from firms that have done well in the past year.
Pay perk: IMF staff pays no income tax at all due to its international status, with managing director Kristalina Georgieva (pictured above) taking her £375,000 annual salary tax-free
The proposals come despite the IMF staff paying no income tax due to its international status. Managing director Kristalina Georgieva takes her £375,000 annual salary tax-free.
The IMF said: ‘To accumulate resources needed to improve access to basic services, enhance safety nets and reinvigorate efforts to achieve sustainable development goals, domestic and international tax reforms are necessary.’
Director of fiscal affairs Vitor Gaspar said a ‘symbolic’ rise in taxes on the rich could bring societies together.
He said: ‘Covid-19 has aggravated inequalities. A vicious cycle of inequality could morph into a social and political seismic crack.’
The IMF expects net debt across the world to stabilise at around 87 per cent of the global economy in the next five years.
The UK debt pile, 75.3 per cent of the size of the economy in 2019 and 93.8 per cent last year, will hit 103.1 per cent of output by 2026.