Lagarde on tax inversions: Authorities have to take measures

Lagarde: I welcome Treasury move on inversions
Lagarde: I welcome Treasury move on inversions
Lagarde: We encourage 3-pronged approach
Lagarde: We encourage 3-pronged approach
IMF, Largard 'lost their minds' on negative rates
IMF, Largard 'lost their minds' on negative rates

If the 's new rules on inversions mean more transparency in the tax code, it's a welcome change, Christine Lagarde, managing director of the International Monetary Fund, told CNBC's "Squawk on the Street" on Thursday.

"The U.S. tax regimes are probably some of the most sophisticated and the most complicated regimes in the world," Lagarde said. "I really welcome the determination of the U.S. Treasury to bring about more transparency and a better understanding of the rules, and the principle of fair share of tax being levied and collected in the right places."

Earlier this month, the Treasury announced regulations to limit U.S. companies from moving abroad for lower tax rates by making it less economically beneficial. Treasury Secretary Jack Lew called on Congress to create legislation that would halt the practice.

IMF slashes world growth forecast again
Christine Lagarde
IMF's Lagarde: We're not in a crisis, but here's the not-so-good news

"I believe good cooperation is always needed — consultation with the business community," Lagarde said. "Which I'm sure [Lew is] keen to entertain. But there comes a point when the Treasury authorities and the tax authorities have to take measures, and they have to do so as is required in order to implement changes. There will be a lot of work to be done in the tax domain — clearly, what we have seen lately as a result of the Panama Papers is going to be a significant wake-up call to all authorities to have a more coordinated and more comprehensive approach."

The Federal Reserve has acted gradually to fuel economic recovery and sustain enterprises with credit, and U.S. job creation that outpaces other nations, Lagarde said. But with 50 million Americans in poverty, the American economic legacy is still at risk, and tax policy needs to be changed as well, she said.

"What is critically important is that monetary policy be not alone," Lagarde said. "And at the moment, it is very much alone. It needs to be supported and accompanied by fiscal policy and with structural measures and reforms."

World is facing a "lost year": IMF
World is facing a "lost year": IMF

Earlier this week, the IMF cut its world economic growth forecast to 3.2 percent, down 0.2 percentage points from its January forecast. The fund's growth expectations have been sliding lower to "an increasingly disappointing pace" since July, IMF Chief Economist Maurice Obstfeld told a media conference Tuesday, according to prepared remarks.

The world economy is more exposed to negative risks, Obstfeld said, as Western nations face political backlash against signs of globalization like the refugee crisis and free trade. Meanwhile, emerging markets have been weighed down by historically low oil prices, the IMF said. Poverty, employment and inflation are all going in the wrong direction, Lagarde said.

"There is recovery and there is growth — that's the good news of the message," Lagarde said. "But it is too slow, too fragile."

— CNBC's Katy Barnato and The Associated Press contributed to this report.