Yikes!
Right now I am not sure an endorsement from Barclays was what I was after. But I’ve got one!
In my last blog I said the objection to country-by-country tax reporting was not expense but: “that a single year’s figure taken out of context won’t tell the whole story.”
And now Barclays agrees with me!
The newly released Citizenship Report 2011 says: “Many commentators seek to compare the taxes paid in a year, in a specific geography, to the profit generated in that geography as a means to test if the tax paid is ‘fair’. This is not a straightforward exercise for two timing-related reasons. First, the corporate tax due on profits generated within a calendar year very often falls across multiple years, so the taxes paid in a year do not necessarily represent the taxes due on that year’s profits. Second, the tax payments in any given year will likely be influenced by the tax consequences of business activities, such as tax timing differences and offsets from losses carried forward from prior years.”
Barclays comments on tax under the heading 2011/2012 Challenges. Here tax sits alongside complaints, lending to business, regulation and (wait for it, wait for it) remuneration. The disclosure about tax is fuller, more thoughtful and more reasoned than what the bank has said previously.
Will it pacify Barclays critics? Not on your Nellie.
Is it a move in the right direction? Yes.
Will others follow Barclays’ lead? Let’s wait and see.