Tags: IMF | Lagarde | Pay | Tax

Do as I Say, Not as I Do: IMF's Lagarde Doesn’t Pay Tax

By    |   Wednesday, 30 May 2012 02:04 PM EDT

Christine Lagarde, head of the IMF, has called on Greeks to pay their taxes. Ironically, she pays no taxes herself.

That's because she's classified as a diplomat, and the Vienna convention clearly states that diplomats are exempt from taxes, including national, regional or municipal taxes, according to the Guardian. She draws an annual salary of $467,940, plus an extra $83,760 allowance.

By not paying taxes, Lagarde following the example of United Nations employees and her predecessor, Dominique Straus-Kahn, who resigned following a sex scandal.

Asked if she thinks about struggling Greeks and malnourished children, Lagarde told the Guardian that she is more concerned about children in Niger.

"As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time," she added. "All these people in Greece who are trying to escape tax."

Greek parents have to pay responsibility if their children are being affected by spending cuts, she told the Guardian. "Parents have to pay their tax."

Predictably, Greeks were outraged out her comments.

Greece, which has cut wages, pensions and public spending in return for international help, has seen its economy drop by 20 percent. Teachers are warning of malnourished children, and people foraging through trash cans has become a common sight.

She later issued a statement saying that she is "very sympathetic to the Greek people and the challenges they are facing."

Her comments could tip the Greek elections on June 17 in favor of anti-austerity parties, which could lead to Greece leaving the euro, according to The Wall Street Journal.

"A Greek exit will be a major failure for Ms. Lagarde as the IMF put together the country’s bailout program," states the Journal commentary.

"Managing the effects it will have on other eurozone countries could prove the IMF’s worst nightmare."

Greece suffers from systemic tax evasion, a problem that's a chief cause of the country's current debt crisis, many observers argue.

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Wednesday, 30 May 2012 02:04 PM
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