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Caroline Flint
is a new entry this year
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Caroline Flint has been on a mission to make
country-by-country reporting (CbCR) public over the past year.
In September 2016, Flint and a number of cross-party MPs
claimed victory for corporate tax transparency after the
government accepted a legal amendment to the Finance Bill 2016.
The amendment gives the government the power to make companies'
CbC reports, which show the companies' tax and revenue
information, public.
"I was delighted to secure this," Flint told
International Tax Review. "It put public CbCR on the
statute. And why is this important? Because we know that
multinational companies can find ways [to minimise their tax
liabilities] through moving their profits and short-changing
countries where they should be paying tax. Too often, companies
and individuals have hidden behind commercial confidentiality
or privacy, which I think has been abused. That is bad for
those businesses and individuals that are not abusing."
Flint's work started in the autumn of 2015, when she became
a member of the public accounts committee, which among other
things keeps a close eye on the tax authority's (HMRC) work.
For several years, the committee had been discussing how much
transparency is necessary to understand how companies operate
and ensuring they are paying their taxes. "This came to a head
when we had a hearing into Google's £131 million ($184
million) tax settlement with the HMRC. We were interested in
how they arrived at that amount of money, but also in the
extreme secrecy and confidentiality surrounding the statement.
The result was that we felt we needed more transparency, which
started a nine-month campaign to get the government to realise
that public CbCR is something that we should support."
Although the amendment to the bill has been accepted, the
work is far from over for Flint. The government now has the
power to make CbC reports public, but it is up to the lawmakers
to use this power. Flint said that the government had suggested
that it did not want to use this power for competitive reasons
– there was a fear that the UK might lose businesses
that do not want to publish their tax and profit
information.
In 2017, Flint will continue to press the government for
action and get confirmation of which countries need to sign up
to public CbCR before the government is willing to implement
it. "Having achieved this change in the law, we have to make
sure that we keep up the momentum and find answers to some of
the barriers the government might put forward. What's important
to me, is that this doesn't become an enabling power that never
gets enabled," Flint said. "I'd like to see businesses stepping
up and providing their tax information to the public regardless
of what the government is doing. That would do huge amounts to
the reputation of businesses."
The EU's actions on CbCR will be another area of focus for
Flint in the coming year. "The EU has proposed, I would say, a
little watered-down version of CbCR, so [I will be] encouraging
the EU to go further," Flint said. "Once you get into this
area, there's a whole host of things that you realise need
closer scrutiny, and transparency is at the heart of it
all."