A sign of the growing discussion in this area is the number of companies and countries that are participating now in the Extractive Industries Transparency Initiative (EITI), a multinational organisation aimed at increasing tax transparency. Danish energy group DONG and Korean company KOGAS, the largest LNG importer in the world, have become the latest companies to support this international group.
Clare Short, who chairs the EITI, will be one of the most prominent speakers at the Tax & Transparency Forum, to be held at London’s Grand Connaught Rooms hotel on May 2.
Short was a member of Parliament for almost two decades, serving as Secretary of State for International Development in Tony Blair’s government between 1997 and 2003, before resigning over the Iraq war. In her new role, she is ideally placed to discuss the latest developments on bringing in country-by-country reporting to the extractive industries. Mining companies are at the cliffface of debates over transparency and Short will be joined on the panel by Chris Lenon of Rio Tinto and Stephen Blythe of BP, who will provide a corporate perspective, as well as Richard Murphy, chief proponent of country-by-country reporting.
It is not just the extractive industries that have to pay attention to the rapidly developing debates around tax transparency, however.
The financial crisis has changed everything. Governments desperate for revenue are looking to close loopholes and claw back as much money as they can from taxpayers, through settlement or in court. Meanwhile, the public mood has turned against avoidance as people take to the street to demand companies pay their fare share of tax.
Development agencies such as Christian Aid and ActionAid, which have long argued that poor countries lose more through tax avoidance than they receive in aid, are pushing for country-by-country reporting globally. The NGOs argue that tax is not simply a legal issue, it is a moral one, and it is not enough that taxpayers remain within the letter of the law, rather they must adhere to its spirit. Most multinationals remain sceptical about country-by-country reporting because it could lead to higher tax bills, but where it was once a niche issue demanded only by hardened activists, now it is something companies cannot afford to ignore.
Tax transparency, country-by-country reporting, information exchange and transfer pricing rules are becoming increasingly important issues for taxpayers to consider in terms of their investors, their reputation and their exposure to risk. These issues will only continue to grow in importance in the coming years and, as such, will become an increasing concern for companies looking more nervously at their bottom lines.
International Tax Review’s inaugural Tax & Transparency Forum brings together the biggest names and most prominent voices on both sides of the argument, including a keynote address by Pascal Saint-Amans.
As the new head of the OECD’s Centre for Tax Policy and Administration, Saint-Amans is arguably the most important figure in global tax affairs. Before taking up the job, he led the Global Forum on Transparency and Exchange of Information for Tax Purposes where he gained extensive experience in bringing together corporates, governments and NGOs to tackle tax haven secrecy.
Saint-Amans will introduce what promises to be a day of robust but constructive debate between taxpayers, authorities, advisers and NGOs. The tide towards tax transparency is not for turning and these are issues companies cannot afford to ignore.
For a full programme, list of speakers and details of how to register, click here.