Emmanuel Macron, the French President, on Friday subtly proposed a fresh initiative to overhaul the global taxation system, with the goal of bolstering so-called “climate change” efforts.
Macron addressed this at the Paris Summit for a New Global Financing Pact, where international delegates were exploring avenues for reforming the world’s financial system, thereby supporting climate change adaptation.
Leading French economists have been rallying for the introduction of a new wealth tax at the national level to support climate change countermeasures, a topic that has sparked intense discussions within Macron’s government.
However, the President side-stepped this debate during a press conference and interviews on Friday, instead proposing the implementation of a tax on financial transactions and an additional levy on airline tickets.
Macron articulated, “I’m in favor of an international taxation to finance efforts that we have to make to fight poverty and in terms of climate [action]…It doesn’t work when you do it alone, the [financial] flows go elsewhere,” according to Politico.
The President pitched the notion of France single-handedly introducing a climate tax.
He mentioned that France already has implemented two such proposed taxation types: one on airline tickets and another on financial transactions.
Macron expressed his intention to encourage other nations to follow suit and rally around these issues.
Macron also proposed that the OECD club, the Organisation for Economic Co-operation and Development, would provide an apt framework for the forthcoming negotiations.
He pointed out that this Paris-based organization had previously been utilized to negotiate a reform for the international taxation of large multinational corporations.
As he closed the summit, he expressed, “There has been a great deal of discussion on the idea of international taxation, over and above what countries and institutions are doing. Whether it’s on financial transactions, maritime transport or certain other models, it will only work if it’s truly international, and so it presupposes an agreement, as we’ve been able to do on international taxation.”
While these plans for international taxation are still in their nascent stages and lack concrete details, Bruno Le Maire, French Finance Minister, argued that such ventures need to be initiated promptly to ensure their success.
“Having negotiated OECD reform on ‘international taxation, minimum taxation and tax on Big Tech, you need five years every time. So you need to start early if you want to achieve results because it takes a lot of time,” Le Maire stated.
An anonymous Elysée official highlighted that these efforts are in their initial phases.
“We are thinking about ways to reinforce international fiscal cooperation, but nothing has yet been set in stone,” he said.
The idea of using taxes to fuel climate change initiatives seems to be gaining popularity within French governmental circles, Politico notes.
Jean Pisany-Ferry, a French economist, recently suggested a temporary wealth tax in France to aid the country’s transition towards renewable energy in a newly published report.
Macron’s suggestion could also serve to initiate discussions on a maritime tax at the International Maritime Organization (IMO) before a meeting scheduled for next month.
Pascal Saint-Amans, ex-director of the OECD’s center for tax policy, argued, “The quite vague reference to fiscal initiatives is a way of shoving a foot in the door and be able to work on a shipping tax.”
The IMO is currently considering the introduction of a global shipping tax, though it remains unclear whether any revenues generated would be used to decarbonize the shipping industry or support climate projects in developing nations.
Macron expressed his support for a maritime transport sector tax, anticipating positive results from the upcoming IMO meeting.
