France’s Francois Hollande gets tough on tax havens

French President Francois Hollande. Picture: Reuters
French President Francois Hollande. Picture: Reuters
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French banks must give more details on their operations in tax havens, while ministers will have to disclose personal assets from Monday, president François Hollande has announced, in a bid to restore public trust after a tax fraud scandal involving his budget minister.

Seeking to show he is improving transparency after Jérôme Cahuzac was forced to quit the government over a secret Swiss bank account, Mr Hollande pledged to step up the fight against tax havens. He also appointed a specialised financial prosecution office.

“For the sake of the French people, we aim to ensure that those who govern them, those they have elected … are not getting richer in the course of their mandate,” Mr Hollande told a news conference yesterday.

He spoke as neighbouring Luxembourg’s prime minister announced plans to lift bank secrecy rules from 2015 for European Union citizens who have savings there, bringing it into line with other EU countries.

Mr Cahuzac stunned France last week by acknowledging, a fortnight after quitting his post amid allegations of tax fraud, that his denials of holding a secret foreign bank account had been lies. His resignation came as a major embarrassment for Mr Hollande, who had promised to uphold high moral standards in public life while in office. His approval rating has hit a record low as unemployment rages near a 15-year high.

To improve the fight against tax fraud, banks will have to make public each year a list of their subsidiaries, along with their activities, staff and turnover, tax paid and any state aid.

“In other words it won’t be possible for a bank to hide transactions carried out in a tax haven,” Mr Hollande said.

In public life, an independent authority will monitor ministers’ asset declarations, while a special prosecutor’s office will focus on major corruption and fiscal fraud cases.

Opposition MPs talked of “diversionary tactics” and kept pressing for more action.

“It is a diversionary operation that is absolutely not up to the challenges of the scandal that discredits the government,” said Christian Jacob, lead lawmaker for the conservative UMP party in parliament.

Meanwhile, Bernard Arnault, France’s richest man, said he has abandoned attempts to obtain Belgian nationality and will keep paying tax in his native country after months of speculation that he, like film star Gérard Depardieu, wanted to dodge a 
75 per cent supertax.

The head of the LVMH luxury goods empire announced his decision in a newspaper interview, saying he had never intended to flee the taxman.

“That message never sank in. Today I’ve decided to bring the confusion to an end. I am withdrawing my request for Belgian nationality,” Mr Arnault told daily Le Monde.

News last year that he had lodged the request sparked angry accusations from French left-wingers that he lacked 
patriotism.

Mr Arnault’s request for Belgian nationality appeared in doubt after a Brussels court in January handed down a negative opinion on it to the Office of Foreigners immigration office.