PWC report little progress on tax reporting

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PWC has reported (but if you try to follow the link you'll probably run into the almost insurmountable access issue that PWC's website represents) that:

The findings from the 2008 BPTA [whatever that is - RM] review are out now in the latest Tax Transparency Framework publication alongside findings from a review of the largest listed companies in Belgium and the Netherlands.

In addition to looking at tax communications against the principles of the Tax Transparency Framework, the publication centres on the discussion of good practice examples in each the framework's key areas (tax strategy and risk management, tax numbers and performance, Total Tax Contribution (TTC) and the wider impact of taxes) and the link with Tax Function Effectiveness. Highlights include:

- The best communicators are getting better and widening the gap between themselves and the rest.

- Risk is more widely covered than strategy which is still very much a minority, although there was a slight increase in the latter in the UK, both in number and breadth of reporting. The horizontal monitoring project has fuelled greater transparency on Dutch tax risks.

- Only one company tried to explain why cash tax paid is different from the accounting charge while reconciliations between accounting profits at the statutory tax rate and tax charges are attempted but not in a way that provides clarity.

- Few companies provide guidance on future tax performance (better in the UK that Belgium or Netherlands).

- There was a desire to communicate the economic contribution made, some using TTC and others using a value added methodology. Few companies linked tax and shareholder value.

This is overall depressing. Tax reporting is not being taken seriously.

But then, PWC have to drop the idea that the purely politically motivated Total Tax Contribution (which tries to come up with the largest tax paid number PWC can construct to hide the tax avoidance they advise their clients to do) has anything to do with good practice before they can take a meaningful part in this debate.