{"id":40706,"date":"2018-02-19T06:28:27","date_gmt":"2018-02-19T06:28:27","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=40706"},"modified":"2018-02-19T06:28:30","modified_gmt":"2018-02-19T06:28:30","slug":"the-b-team-are-lowering-the-bar-for-tax-reporting","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2018\/02\/19\/the-b-team-are-lowering-the-bar-for-tax-reporting\/","title":{"rendered":"The B Team are lowering the bar for tax reporting"},"content":{"rendered":"

Alex Cobham at the Tax Justice Network published this blog<\/a> late last week and I think it worth sharing because it shows that whilst some in business now recognise that tax responsibility is an issue that they must address they are still a long way from being willing to address the issues in the way that commitment to the Fair Tax Mark would, for example, require. I share Alex's disappointment that yet another PR exercise is distracting from what is really required:<\/em><\/p>\n

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The B Team, [who describe themselves] as the leading global group for responsible business, has released a report: \u2018A New Bar for Responsible Tax<\/a>\u2018. To our great sadness, it moves the bar in one direction \u2014 towards the bottom.<\/p>\n

When the B Team first got in touch to discuss their plan to work with major multinationals to establish a new standard of tax transparency, we were excited. The one thing lacking so far in the process towards public\u00a0country-by-country reporting<\/a>\u00a0has been a champion among the major multinationals \u2014 and that\u2019s exactly who the B Team work with. Moreover, they have made some genuine progress towards beneficial ownership transparency for their own group structures. We felt their staff were on the right track, and we hoped that they would be able to take the business members with them.<\/p>\n<\/div>\n<\/div>\n

It soon became clear that the members were less keen. But even so, the report which has now been released is desperately disappointing.\u00a0\u00a0<\/span><\/p>\n

Tax justice and responsible business<\/h2>\n

The Tax Justice Network has always reflected the importance of business actors. While we resist giving undue credit purely for economic size, and we are well aware of the lobbying power to resist financial transparency and progressive tax, we also understand that the private sector is far from monolithic.<\/p>\n

Small businesses suffer more than most from the unlevel playing field created by multinationals\u2019 tax avoidance and the self-serving lobbying of their professional services firms. And all businesses are controlled by people, with social consciences and community spirit \u2014 so that many staff and directors, whatever the size of the business, support the principles of tax justice. Investors, meanwhile, respond both to ethical motivations and to the growing evidence that multinationals\u2019\u00a0tax avoidance does not yield higher return<\/a>\u00a0\u2014 but does leave\u00a0investors to bear higher risks<\/a>.<\/p>\n

With that in mind, for example, we helped to support the development of the\u00a0Fair Tax Mark<\/a>\u00a0which allows more responsible businesses to have this independently affirmed to customers and the wider public. The Fair Tax Mark is now used in the UK by a range of businesses, from local firms all the way to FTSE 100-listed household brands such as the energy giant\u00a0SSE plc<\/a>.\u00a0We have also worked with the Responsible 100 group to create a\u00a0tax transparency standard<\/a>\u00a0which has been taken on by the likes of financial services multinational\u00a0Legal & General<\/a>.<\/p>\n

TJN also enjoys productive cooperation with responsible investors. For example, the signatories to the UN Principles for Responsible Investment now have nearly $100 trillion of assets under management \u2014 and their\u00a0investors\u2019 recommendations for corporate disclosure<\/a>now call for publication of country-by-country reporting.<\/p>\n

We are also participating in the work of the standards body,\u00a0Global Reporting Initiative<\/a>, to enhance tax transparency. Along with representatives from the big four accounting firms, two global businesses, academia, investors and labour, I\u2019m a member of the eight-person\u00a0technical committee<\/a>\u00a0working on a potential new standard on disclosures on tax and payments to government.<\/p>\n

And of course, we also work with agencies across the United Nations and OECD to support technical proposals using country-by-country reporting \u2014 which is a key component of the policy platform we put together after our establishment in 2003. Prof. Richard Murphy, also on the GRI technical committee, wrote the original draft international accounting standard which formed the basis for the OECD standard adopted in 2015 \u2014 but so far only for private reporting to tax authorities. In support of the public country-by-country reporting that we\u2019re confident is on the way, we\u2019ve begun to develop an\u00a0open database<\/a>\u00a0to which multinationals are invited to contribute, and where technical analysis can be taken forward.<\/p>\n

Raising the tone<\/h2>\n

\"\"<\/a>\u201cThe B Team is a not-for-profit initiative formed by a global group of business leaders to catalyse a better way of doing business, for the wellbeing of people and the planet.<\/strong>\u00a0Founded in the belief that the private sector can, and must, redefine both its responsibilities and its own terms of success, we are developing a\u00a0\u2018Plan B\u2019\u00a0\u2014 for concerted, positive action that will ensure business becomes a driving force for social, environmental and economic benefit\u2026\u201d<\/p><\/blockquote>\n

The B Team includes a number of high profile figures who have spoken out on key tax justice, financial transparency and\/or human rights issues, including Gro Harlem Bruntland, Mo Ibrahim, Ngozi Okonko-Iweala, Mary Robinson and Muhammad Yunus. Included too are a range of business leaders \u2014 some from companies that have championed aspects of corporate social responsibility. Four years ago, for example, Unilever\u2019s Paul Polman made a series of striking statements while accepting an award for development leadership, including this:<\/p>\n

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\u00a0Others have an unclear commitment to tax and public services. One of the founders, Richard Branson of Virgin, said on the launch:\u00a0\u201cBusiness has previously been concerned with the bottom line and has not got involved in society or with the wider issues of the world.\u00a0All businesses should become a force for good, and not just focus on short-term profit.\u201d That stance is\u00a0hard to square<\/a>\u00a0with the Virgin Group\u2019s structure in secrecy jurisdictions, and its willingness to sue the UK\u2019s National Health Service for taxpayers\u2019 money.<\/div>\n<\/div>\n<\/div>\n<\/div>\n

But perhaps this is the moment for change\u2026 In keeping with their mission statement, and the broad area of work referred to above, the B Team have set out \u201cto develop a set of Principles that offer a clear framework for responsible tax practices.\u201d To that end, they make the broad case for the importance of tax \u2014 including as critical to achieving the UN Sustainable Development Goals. This, we love.<\/p>\n

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We should celebrate the progress that this embodies. It\u2019s not so long since the\u00a0dominant narrative<\/a>\u00a0promoted by major multinationals and their advisers was to deny that tax (paid by them, in lower-income countries) had any development benefit at all. (After all, the governments are all corrupt, they spend it on themselves, why should we pay anything?)<\/p>\n

But the change is well established, with broad recognition of the central role of tax in supporting development and challenging inequalities. More than any rhetorical shift, what matters is whether there\u2019s a commitment to\u00a0behavioural change<\/em>\u00a0that will actually support demonstrably different outcomes.<\/p>\n

The B Team report identifies seven principles, each with a range of supporting bullet points. To summarise:<\/p>\n

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  1. Accountable governance\n