Tuesday, July 12, 2011

ActionAid: Tax avoidance ‘as big an issue as sweatshops’

ActionAid, in partnership with FairPensions and Fairfood International, have issued a new report entitled Tax responsibility: The business case for making tax a corporate responsibility issue.

It is accompanied by an excellent presentation from Martin Hearson, here. The report notes that:
A growing number of businesses and investors are concluding that there is a business case for viewing tax planning through a CR lens. Drivers include the increase in public scrutiny of corporate tax avoidance, and a renewed effort to tackle tax avoidance by revenue authorities in developing and developed countries.
The accompanying article is entitled Tax avoidance ‘as big an issue as sweatshops’ says ActionAid. We don't know how you would measure such a thing to make a comparison - and Hearson himself says that "Tax responsibility is qualitative, not quantitative" - but it's not an unreasonable thought. His five key points are:
  • There is a business case for applying corporate responsibility tools to tax planning
  • Tax is becoming an essential part of the corporate responsibility agenda
  • Compliance with the letter of the law is no longer sufficient
  • Transparency can reduce reputational risk
  • Tax responsibility is qualitative, not quantitative
We would agree on every single point.

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