A campaign by aid charities for fairer tax arrangements in the UK and around the world has had ‘extraordinary success’, but there is still a long way to go, the Conservative Party Conference heard yesterday.
Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, made these comments at a fringe event at the conference called Taxing Times: how businesses, charities and government can work together to fight tax avoidance.
He told delegates that charities pushing this campaign for fairer tax responsibility and against corporate tax dodging had been successful, but there is still a way to go.
He said: “I’d like to start by congratulating Oxfam, Action Aid and Christian Aid for the progress that has been made in this area. When you started inviting me to speak at these events five or six years ago no one was really interested; actually governments have changed the rules since then.
“This is actually a campaign where you have had extraordinary success, but I don’t think you can say the job is done. Because there are a number of things that indicate that the report card says “good progress made, but job not quite finished”.
He said that in January 2017, 100 countries will be signing up to a new tax framework that will “effectively govern how information is exchanged through the tax authorities, the amount of transparency, and a number of other factors which are undoubtedly a move in the right direction”.
But, he said: “Before you celebrate, that is only 100 countries and there is one big ponderable. Will the United States take part? If the US don’t take part, this isn’t going to have the success we all hope for.”
He also said that the accountancy profession is very much on the right side of the argument, and that in November the ICAEW will launch a “revised professional conduct in relation to tax”. He said: “There are seven professional bodies taking part in that. The ones that aren’t are the lawyers. I think you should be looking over there very soon.”
Oxfam research on corporate tax
The fringe event, hosted by the ICAEW alongside Oxfam, ActionAid and Christian Aid, coincided with the launch of research from a poll produced by YouGov and commissioned by Oxfam.
The research showed that 90 percent of people said businesses had a 'great deal' or 'fair amount' of responsibility to improve working conditions.
When asked about business's primary responsibility, the general public selected paying their fair share of tax in all countries where they operate (88 per cent) and avoiding using offshore havens to artificially reduce their tax bills (84 per cent) significantly ahead of maximising profits for shareholders (66 per cent) which is often assumed to be companies' primary responsibility.
Mark Goldring, chief executive of Oxfam, chaired yesterday’s event.
He said: “Our concern from the three organisations [Oxfam, Christian Aid and ActionAid] is the impact on people living in poverty in the world’s poorest countries. The countries that can’t afford to buy the drugs, can’t afford to run the schools, can’t invest in their own industry and their own development.
“We have got to get a set of rules and a set of public expectations translated into corporate behaviour. They have got to be fair, they have still got to encourage investment and they have got to allow for reward and return. We are not there yet. Since we began talking about this a couple of years ago we have had a number of positive initiatives. We are heading in the right direction.”
