Tuesday, June 02, 2009

Country by Country reporting in Financial Times, New York Times

The New York Times has a good editorial today which looks at recent work by Global Witness and contains, among many other good things, this:

"There are many reasons why this is a good moment to go after kleptocrats. One is the recent global financial meltdown, which brought home the need for banks to be more open about the risks they take and the customers they accept. Then, there is the pledge taken by the Group of 20 nations to crack down on tax havens, where tax evaders and dictators get to hide behind banking secrecy."

Good. Solutions?

"Better regulation by (TJN: of?) international banks, which often fail to do due diligence on high-ranking or flush clients."


"A second proposal, now pending in the U.S. Congress, would force oil companies and other commodity producers to report all payments to host governments on a country-by-country basis."

We recently noted how Country-by-Country (CbC) reporting is starting, it seems, to be getting traction. So we are heartened to see this, in the Financial Times today too: a more in-depth article looking into CbC.

"A clash between an aid charity and the four biggest accountancy firms over international tax reporting rules has gained new impetus after a top Revenue & Customs official stepped into the debate.

Supporters of Christian Aid are sending postcards and e-mails to the heads of the accounting firms demanding changes to international rules. The campaign is designed to tackle what it views as tax abuses that drain developing countries of revenue. Dave Hartnett, permanent secretary at the Revenue, told a press conference in Paris last week that it was “an idea that is gathering momentum”.

Quite right too. Some accountants are arguing against it, the article explains, but many of them feel (wrongly) that their mandate is to serve the interests of their corporate clients, so they don't see the point of providing information to other stakeholders - like ordinary citizens or tax authorities.

TJN's senior adviser Richard Murphy, who developed the CbC concept, has published a full version of the FT article here. The article quotes South Africa's former finance minister Trevor Manuel - perhaps this was sourced from our quotations page - as saying:

"It is a contradiction to support increased development assistance, yet turn a blind eye to actions by multinationals anothers that undermine the tax base of a developing country."

Once again: well said, Trevor Manuel.


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