All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

The role of tax transparency and corporate social responsibility

itr-tax-transparency-120x120small.jpg

The public attention generated by recent UK tax settlements, as well as continued pressure on corporates from protest groups, have brought the role of transparency in corporate social responsibility to the fore.

At International Tax Review’s Tax & Transparency Forum in London on May 2, representatives from Reed Elsevier, Pelham Bell Pottinger, Save the Children, Christian Aid and Macfarlanes, will discuss the potential benefits of greater tax transparency for companies, where it fits into companies’ CSR agendas, and provide a view from business about the contributions companies make, and the importance of reputation after the financial crisis.

Panel moderator Joseph Stead, senior economic justice adviser at Christian Aid, says the desire to know more about companies’ tax policies and compliance is increasing from a variety of perspectives, one of which is “trying to better understand the role and contributions companies are playing in our societies”.

“This clearly gives the potential for tax to fit within the CSR agenda, but there appears to be no consensus so far on the best way to do this,” says Stead.

In the eyes of the public, social responsibility, good citizenship and so on are undeniably linked to payment of taxes, and the disclosure of Barclays using tax avoidance schemes exemplifies the reputational damage that can be sustained through exposure of shortcomings in this area.

David McNair, from Save the Children, will address the issue of trust between the public and businesses.

“The 2008 financial crisis marked a watershed where trust in business collapsed,” says McNair. “That lack of trust extends to firms’ corporate responsibility, seen by many as window dressing.”

“The demand for an ethical business model is now mainstream – a model which goes beyond contributions to charity, positive though that is – and extends to the fundamentals of the business model,” he adds.

James Henderson, managing director at Pelham Bell Pottinger, will analyse whether misunderstanding between parties on both sides of the debate is a factor that can be overcome, and how best this can be achieved.

“The big numbers bandied around ensure the issue is driven toward the top of the media and political agenda, but often there is misunderstanding among the public of how the processes involved work, or a lack of information available,” he says.

The panellists will turn their attention to addressing the following questions:

  • What information and how much information is disclosed. Will this lead to misinterpretation?

  • Who should bear the cost for this disclosure?

  • Should it be voluntary or legislatively bound?

The onus on tax reporting and communications regarding the management of tax affairs, and the need to be seen to be paying a fair contribution, all driven by pressure from media, pressure groups, civil society organisations and government, has given rise to many issues, says panellist Ashley Greenbank, head of corporate tax at law firm Macfarlanes, including:

  • How does a company balance these objectives with its obligations to minimise its tax burden?

  • What is a “fair” share if it is not the tax legally due?

  • Is the focus on tax reporting and communication really just a distraction from the real issue, that is, the tax rules themselves?

McNair will look at the issue of “tax morale” and how it impacts developing countries who need the right governance in place to “protect the poor and vulnerable and ensure the benefits are shared”.

“Corporate tax forms a significant proportion of tax receipts in developing countries,” he says. “But tax morale is also important – for others to be incentivised to pay tax, they need to see evidence that the big players are paying their way.”

The forum is free to attend for tax directors and NGOs. For a full programme and details of how to register, click here.

More from across our site

Multinational enterprises run the risk of hefty penalties if the company in question fails to register for VAT when providing electronic services in South Africa.
Tax directors have urged companies to ensure they have robust tax risk management controls when outsourcing tax functions.
Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree