KPMG – there is no morality in taxation

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The December edition of Finance Magazine in Ireland, sponsored by KPMG had an article entitled 'Is Tax on Your Board's Agenda' in it. Written by Liam Lynch, a tax partner at KPMG it includes this classic:

The 'moral' agenda

Alongside these developments, a worrying tendency seems to have emerged among external stakeholders to make 'moral' judgements about tax planning and to expect companies to manage their tax affairs in a 'moral' way. The 'fairness' of corporations' tax policy is frequently questioned by tax authorities, pressure groups and media.

It continues:

Let's be clear about this. Tax is a cost to business. As with any other cost, the board members owe their shareholders a duty to manage that cost by the legal means afforded to them. Where a company's tax philosophy is heavily influenced by a duty to shareholders, the focus should be on responsible management of tax cost. Again the starting point should be board level decisions on how the risk needs to be managed.

It seems to have become fashionable to use terms such as 'aggressive tax planning' and 'unacceptable tax minimisation' synonymously with 'tax avoidance', whilst arguing that such practices demonstrate a lack of morality in tax matters. However there is no agreement on what constitutes morality either within or outside the sphere of tax. We cannot therefore have recourse to such a term in determining whether planning of tax affairs has crossed some illusory line. It is in the interests of some parties that lines are blurred in the perception of the difference between legal tax avoidance and illegal tax evasion. However, we must rely on the rule of law to protect the rights of both taxpayers and exchequers alike. Otherwise we will have to deal with such questions as to whether we should pay tax if it funds something we consider immoral. That is surely something we wish to avoid.

Ah, so there we have it. It's an amoral world in which only the law gives us guidance on what we may or may not do.

What a bizarre logic. How utterly wrong.

How profoundly in conflict with the whole ethos of corporate social responsibility.

How, if I might say so, morally bankrupt.

At the end of the day, how profoundly unprofessional.

That's KPMG for you.


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