France joins call for 2% billionaire tax

France joins call for 2% billionaire tax

May 6, 2024

At the IMF meeting in Washington, France reiterated support for a 2% tax on the global wealth of billionaires, with a target of 2027 for the new tax

France has expressed support for calls from the Brazilian government, during its ongoing presidency of the G20, for a global wealth tax on the world’s wealthiest taxpayers, which could result in an additional tax charge of around £6m a year per head.

During a meeting of G20 finance ministers hosted by the International Monetary Fund (IMF), Brazil’s finance minister, Fernando Haddad, repeated his calls for countries to build on the political momentum of the two-pillar international tax plan, including the minimum tax on large multinational companies, by extending a similar mechanism to billionaires.

Speaking at the meeting, Bruno Le Maire, French finance minister, reiterated France’s support, stressing that any measure should be based on the best practices of the OECD on global tax rules.

‘The popular demand for this type of taxation is overwhelming,’ Le Maire said. ‘It’s feasible and we understand how it can be done very quickly.’

The move was also supported by IMF chief Kristaline Georgieva who said closing tax loopholes and ensuring the rich paid their fair share was critical.

‘When policymakers have the will, there is a way, and we have put out what the way is,’ Georgieva said.

Haddad is now pushing for a joint declaration on a billionaires’ tax at the G20 meeting in July.

The idea was first proposed by Esther Duflo, the economist and MIT professor of property alleviation and development economics, and it is gaining support.

Last October the EU Tax Observatory published a detailed analysis of the proposal. This estimated that a wealth tax would cost the world’s 2,781 billionaires around $7m (£5.6m) in additional tax a year. Between them, these individuals have total wealth of $13 trillion. At the moment, they pay an average effective tax rate of between 0% to 0.5%.

Speaking at the IMF meeting, French finance minister, Bruno Le Maire, said France would support a billionaires’ tax.

Haddad has called for countries to commit to the introduction of a coordinated minimum tax on substantial fortunes, to be set at 2% annually, to be levied on the world’s wealthiest 3,000 billionaires.

‘Taxing wealth rather than income would reduce opportunities for tax avoidance or the deferral of liability,’ Haddad said.

It is estimated the levy could raise around £250bn in revenues annually and support wealth distribution efforts.

There were 171 billionaires in the UK in 2023 with combined wealth of £683bn, according to The Sunday Times Rich List.