This content is from: Jurisdictions

Tax sector is failing to address racism

Anti-racist protests in the US and worldwide have brought attention to a global problem. Racism still exists in the tax sector and more needs to be done to tackle the issue.

Racism is a persisting problem in society. Reams of data highlight the issue in the wider businesses community. Tax is no exception. Close to 35% of 170 responses received during ITR’s survey on diversity in the tax sector said discrimination because of race and ethnicity is still a problem in the tax sector.

“It seems to me that a clear example is a lack of representation of minorities in the higher positions [such as] director, VP, senior manager, etc.” said one EU-based in-house senior tax professional who is part of the Black, Asian and Minority Ethnic (BAME) community.

Another senior international tax manager from France and working in Switzerland said she, and her three other black colleagues, gave up pursuing a career at a Big Four accounting firm because they knew they would never be promoted.

“There were three or four black people within the transaction tax group and we were never promoted. Eventually, we left the Big Four because we were never ever getting promoted,” she said.

She added that one of her male black colleagues who deserved to become a partner quickly realised there was no chance of progression. Despite having good relationships with his senior colleagues, having many personal clients and bringing new business to the firm, he was denied promotion to the partner level.

When he gave up and finally left the company, his managers said they always assumed he would “just return to Africa to practice tax”, passing the comments off as jokes among friends.

Sadly, these types of anecdotal accounts are common and affect people from many backgrounds. Furthermore, various studies and data show the extent of discrimination in the workplace. Structural racism is often subtle, with parts of society habitually pretending it does not exist or they do not know how to change it.

“Racism isn't name calling anymore. It's much more sophisticated than that,” said one tax professional from the BAME community in the UK, adding that everyone needs to be re-educated on the topic, even if it does not directly affect them.

“People have to listen, people have to be open to be re-educated, and then when people are open to that, then the message has to be delivered in the right way,” he said. Education then needs to address how change should be implemented. However, if people are not open to listening, then achieving change will be difficult.

“Just because you're brown or black doesn't mean you're the authority on understanding what racism is,” the tax professional added, saying he feels a lot more equipped now to talk about racial discrimination after educating himself during his tax career.

While the tax profession is showing some progress in the diversity debate, Tasneem Kadiri, UK and Ireland tax director at L’Oréal, said that there is still not enough being done to address the lack of representation of BAME individuals at senior levels.

“As a tax director from an under-represented group, I am often asked to speak on the topic of ethnicity. Ethnic minorities are still under-represented in senior level roles and this is especially the case at partner and director levels,” Kadiri wrote in an article for ITR. “We have a long way to go to get to a truly diverse workforce in the tax profession.”

The senior international tax manager from France said that for anyone trying to break the glass ceiling for ethnic minorities in senior roles, you have to be strong-willed, passionate and prepared to tackle the barriers people and organisations will erect to stop you achieving your goals.

However, even with all these qualities, the problem with structural racism is that the people making decisions may be biased and could, therefore, stop the most talented individual from succeeding. The business community needs to take more effective action to promote change. This can be done through affirmative action, such as recruitment procedures that use blind CVs that eliminate names, gender and educational institution and using diversity quotas. Moreover, continued training and awareness in the workplace is essential such as providing and attending workshops.

The change, however, has to come from business leaders.

Open racism and abuse must stop

For a tax sector that is looking for global solutions on how to tax businesses, the approach to diversity also requires an international view. Corporate policies and diversity groups are not enough.

“I have sometimes experienced racist ‘jokes’ about the colour of my skin,” said the EU-based tax professional, but “I have clearly reacted in a professional manner and requested for apologies but did not actually follow up with HR”.

As a senior tax person now, the tax professional said they would tell their younger self to file more complaints with HR when having clear facts of discrimination.

However, racism is widespread and many people are experiencing and observing it across the sector. Tax professionals say channels to complain do not exist across law and accounting firms and where they do you cannot use them because you are then perceived by managers as weak and unsuitable to be a lawyer, let alone be promoted.

“My worst experience was at the Big Four,” said the French tax manager. “There was one partner who was openly racist and everyone knew it. He would literally refuse to speak to anyone who was not white or to have anyone non-white on his team or working on a job with him. I never spoke to him and he avoided having any contact with me and everybody behind the walls was saying that he is a racist.”

The tax partner remained a partner at the firm until leaving recently to set up his own firm, but no one appears to have challenged his open discrimination. What makes the situation worse is the labels attached to those who do complain.

"You're not supposed to complain about the hard work and the long hours. You are not supposed to complain about the mistreatment, the aggressiveness, and the insults,” said the French tax manager. "I have had senior managers who were throwing books at my head. There was so much abuse. You don't complain because it's the rule of silence, nobody complains."

"If you complain, they tell you that you are weak that you're not built for the job, you cannot handle it, that you should go and work somewhere else where life is easier because you're not strong enough to handle this job,” she continued.

Most tax professionals start their careers at one of the Big Four firms and the pressure of succeeding is immense. The way power is abused by senior managers against junior employees without a means to speak up is allowing institutional discrimination to continue in plain sight.

“They tell you that if you fail with them, you will fail forever, you will never be a good lawyer, and that nobody will hire you. They threaten you,” said the French tax manager.

These negative situations and dwindling hopes of promotion has led to a defeatist attitude among many. Those worried about being viewed by managers as complainers prefer to keep their head down and just do what their job requires, rather than speaking out and risk damaging their career.

When one UK tax professional spoke up about the lack of BAME managers at his organisation, he said the experience was “very scary”, but raising the issue empowered him. “Once I did it, I felt confident and I felt the confidence to do it again and less scared of doing it,” he said.

The fight against individual and systemic racism is not a smooth journey, but it requires education and conversation, as well as real and public changes among individuals and institutions globally.

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