Monday, November 08, 2010

Tax becoming a source of reputational risk

Tax, as the Financial Times says today, is "becoming an important source of reputational risk." So it should be.

The newspaper's tax writer, who has viewed tax justice with a somewhat jaundiced eye in the past, has a long article in today's paper, looking at how the issue is rising up the agenda. First of all, we are pleased to see this, from Standard Chartered:

The global bank has already made a start on publishing accounts for individual countries, but it wants a level playing field. Dan Mobley, head of government relations, says: “We cannot justify spending a lot of resources if our competitors are not. We need civil society to push on this.”

Mobley isn't the first to tell us this (and he was in an online debate with TJN's director John Christensen recently, where one of his lines was "We are in danger of furious agreement!"). Mobley's latest comment, however, also illustrates what we are up against: forces of race-to-the-bottom competition, which can't just be wished away. It is imperative - truly imperative - that civil society, around the world, stands up to the task. We have fabulous allies already - but still far, far too few.

It's not particularly helpful to have the FT, however, calling these campaigns "emotive," and giving the campaign for country by country reporting as an example of this. She would do well to read a forthcoming Christian Aid report (no link yet, sorry) the result of discussions on tax and development with tax directors from some of the largest companies in the world, many of whom agreed that the compliance costs should not be a constraint, several of which said they would be willing to explore setting up country-by-country reporting.

And the story repeats an old canard:

"Unilever, for example, insists that “there are other and better ways to tackle poverty and corruption, for example by building the capacity of tax authorities in the countries concerned”."

Since when did the campaigners say that we should not be building up the capacity of tax authorities in the countries concerned? We, for example, have been banging on about this for a long time, and we are by no means alone. And why should this be about one thing or the other? Obviously -- obviously -- a comprehensive approach is required.


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