If the environment matters, so does Green Futures.
On the launch of the world’s first independent accreditation scheme to address responsible tax, Paul Monaghan hopes to see consumers reward those that pay by the rules.
If 2012 was the year that the world woke up to the inequities of corporate tax avoidance, with the barefaced tax aggression of Starbucks, Amazon, Microsoft and others forcing the issue on to the front pages... And if 2013 was the year that Governments started to respond (albeit meekly), with the UK‘s pledge to close the tax gap and the G8 nations accepting the need to clamp down on tax avoiders at their summit in June… Then 2014 will hopefully be the year that consumers became empowered to take action with their wallets: punishing the abusers and rewarding the payers.
The campaign for a more responsible approach to tax took a decisive step forward on 20 February when Midcounties Co-operative, Unity Trust Bank and The Phone Co-op became the first businesses to be accredited by a new Fair Tax Mark, the world's first independent accreditation scheme to address the issue of responsible tax. The Mark certifies that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place. It has been developed by a team of tax justice campaigners (including tax guru Richard Murphy), a seven-strong panel of tax experts, and specialists in corporate social responsibility (CSR) and ethical consumerism.
Recent polling from the Institute for Business Ethics has found that tax avoidance is now the number one concern of the UK public when it comes to business conduct. People have a real appetite to act on this issue. Starbucks has been forced into ‘voluntarily’ increasing its contributions to HMRC following customer anger.
Nearly a decade ago, I wrote the foreword to a flagship report, ‘Taxing Issues – Responsible Business and Tax’, which argued that the subject needed to be a core concern of the CSR world. Back then, tax avoidance was shrugged off like a rare incident of anti-social behaviour. Now the time has come for consumers, business and government to take it seriously.
The benefits of tackling tax avoidance are immense – particularly in poorer parts of the world, where three times more is lost to tax havens than is received in aid. Oxfam claims that lost tax revenue – estimated to be around £100 billion a year globally – is enough to eliminate extreme poverty twice over.
Ben Reid, Chief Executive of Midcounties Co-operative, a £1bn-turnover business, puts the case for ‘paying by the rules’ succinctly: “Last year we contributed the equivalent of 15% of our profits to charitable causes. It makes no sense for us to undermine this by engaging in aggressive tax avoidance schemes, even when to do so would be legal.” In a similar vein, Richard Wilcox, Managing Director of Unity Trust Bank notes: “Established as a bank to promote the common good, we believe a fair tax system is vital for society to thrive. Businesses have a duty to pay a fair share and to invest in the UK economy and society as a whole."
The Fair Tax Mark has already secured the backing of some political heavy-hitters. Margaret Hodge MP, Chair of the House of Commons Public Accounts Committee, called it a “fantastic idea”, adding: “Seeing customers vote with their feet is perhaps the most effective deterrent there is to companies engaging in tax avoidance or other irresponsible practices."
Caroline Lucas, MP, said: "This is great news for consumers, for transparency, and for the principle that everyone should contribute their fair share.”
Paul Monaghan, Director of Up the Ethics, and Corporate Responsibility Specialist at Fair Tax Mark.
For further details please visit www.fairtaxmark.net. The Fair Tax Mark campaign is particularly in-terested in hearing from multinational enterprises who would act as Pioneers for the development of new bespoke multinationals methodology.
Photo credit: Drazen_/iStock/Thinkstock