Research funding from Luminate to enable Fair Tax Mark to explore what ‘Fair Tax’ looks like outside the UK, and the scope for new standards that would enable businesses across the globe to be certified for the first time
The Fair Tax Mark is growing robustly in the UK. More than fifty businesses have now been certified, with half of those advancing in the past eighteen months. They include FTSE-listed plcs, co-operatives, social enterprises and large private business – who between them have income of £50bn and over 7,000 offices and outlets. Supporting initiatives such as Fair Tax Week and the Councils for Fair Tax Declaration are bedding down nicely, and adding to the growing UK movement for business to say what they pay with pride. However, currently, we cannot assess businesses head-quartered outside of the UK – our three accreditation standards (multinational business, UK-only trading and microbusiness) have all been developed with UK-incorporated parent companies in mind.
It is therefore timely (and possibly even overdue) that we consider the development of a new suite of standards that would allow us to certify businesses that have their ultimate company situated outside of the UK. This first requires that we consider the different legislative tax regimes across the globe (e.g., the unitary taxation regime of north America), emerging trends (such as the rise in phantom foreign direct investment as a means to avoid tax), the emerging OECD/G20 inclusive framework on base erosion and profit shifting project and any emerging voluntary approaches from business on responsible tax conduct. We are therefore delighted to announce that a grant from Luminate has allowed us to commence a research and development project in this area.
There is a pressing need for us to develop international standards given:
- we are being approached more and more by businesses from outside of the UK, who want Fair Tax Mark accreditation;
- regulators, investors and municipalities across the globe are telling us that they want to encourage Fair Tax Mark accreditation (or equivalent) in their jurisdictions;
- there is in many parts of the world an ongoing international race to the bottom on tax, and this creates a downward pressure on standards everywhere (including in the UK); and
- if we don’t step up and develop standards, then it is likely that unscrupulous accounting and auditing entities will step into the vacuum and promulgate ‘bottom of the barrel’ tax kitemarks.
Which isn’t to say that there aren’t good initiatives already out there that we can learn from: we’ll be giving serious consideration, for example, to how we dovetail synergistically with the UN PRI’s investor guide on corporate tax disclosure and the emerging GRI tax reporting standard. As with the development of all of our standards, we’ll be utilising the skills and experience of our Technical Advisory Group – but, we’ll be also be augmenting this with bespoke international outreach initiatives. With a view to developing beta standards for piloting with multinational enterprises sometime in 2020.
In parallel, there will be a consideration of the optimal approach to roll-out and implementation of the accreditation standards outside of the UK; grounded in the recognition that we operate as not-for-profit social enterprise rooted in the belief that paying tax responsibly should be celebrated and any race to the bottom on tax resisted.
This is an exciting new phase for the Fair Tax Mark. If you would like to get involved please feel free to contact us at email@example.com