Responsible tax conduct is one of the biggest issues of our time
Tax contributions are a key part of the positive social and economic impact made by business – helping the communities in which they operate to deliver valuable public services and to build the infrastructure that allows business to thrive. A small, but rapidly growing, number of progressive businesses now publicly recognise this and say what they pay with pride.
The growth of tax havens and unethical corporate tax conduct have become prominent concerns across the world. Aggressive tax avoidance negatively distorts national economies and undermines the ability of business to compete fairly, both domestically and internationally.
The pressure for change has now reached a tipping point. Across the world, there is now general agreement that tax laws need to be rewritten to end the global race to the bottom. Institutional investors and asset managers are paying much greater attention to the tax practices of companies in their portfolios, recognizing sound tax practices as an important sustainability issue and that companies employing aggressive tax practices could be exposing themselves to growing regulatory and reputational risks. Citizens across the world are insisting by a large majority that Government support for business (i.e., in connection with the Covid-19 pandemic) should be conditional on recipients ending the artificial use of tax havens and tax avoidance.
It is no longer enough for a business to claim that their tax conduct is acceptable as long as they are not breaking the letter of the law – in the same way that such a narrow framing of impact would be frowned upon if it were to be deployed with environmental and human rights considerations.
“Earnings that are reliant on tax planning rather than genuine economic activity are vulnerable to changes in tax regulation and enforcement… Even if specific tax regulations are not changed, more proactive enforcement by regulators suggests the earnings risk resulting from these strategies is increasing. As countries and their tax authorities become increasingly concerned with the exploitation of loopholes in international tax frameworks and are under fiscal pressure to fund additional government programmes, the incidence of tax disputes and litigation will increase.” – The United Nations Principles for Responsible Investment (PRI)
Fair Tax Mark accreditation – the gold standard of responsible tax conduct
The Fair Tax Foundation was launched in 2014 and operates as a not-for-profit social enterprise.
Via our Fair Tax Mark accreditation scheme, we seek to encourage and recognise businesses that pay the right amount of corporate income tax at the right time and in the right place. We believe that businesses that pay their taxes willingly, fairly and transparently should be celebrated and rewarded. This includes those who operate legitimate tax planning that embraces both the spirit and letter of the law.
The focus of the Fair Tax Mark’s consideration is corporate income tax. Businesses are subjected to many different types of tax, but corporation tax has an importance way beyond the revenues it raises. As argued by the Tax Justice Network: “It holds the whole tax system together. It curbs political and economic inequalities and helps rebalance distorted economies.”
Stand out from the crowd
Securing Fair Tax Mark accreditation will enable you to:
- Instil pride in employees and boost customer confidence
- Stand out in your sector, especially when bidding for contracts
- Reassure investors that you are an exemplar and managing tax-related risks well
- Win positive public and media attention for your commitment
- Boost your brand, via enhanced CSR and ESG credentials
- Become part of a growing network of pioneering businesses who want to lead on responsible tax practice
- Get ahead of the curve of new tax regulations and legislation
- Help shape the tax landscape toward a fairer future