Yesterday the Commons’ International Development Committee heard evidence on the EU plan to force mining and oil companies to disclose all tax payments to developing countries.
The Times reports that Tim Scott, Glencore’s global head of tax, said that publishing accounts on a country-by-country basis would be very expensive: “it is not clear that anyone would be any wiser about what the right level of tax would be.”
That’s 100% true.
Let’s match it with another statement that’s 100% true. If accounts were to be published showing what had been paid to government in tax, the public would know the exact figure that had been paid.
Currently they don’t.
What’s the consequence of that?
Nobody has any information on the tax figures paid in the developing countries by many multinationals. So it’s left to NGOs to hypothesise. Those that do believe in the positive contribution of businesses to local communities are left to argue in a vacuum without the data.
So what’s the way forward?
The real issue is not expense. It is that a single year’s figure taken out of context won’t tell the whole story. The same’s true of a profits figure for a single year. That’s not stopped companies from publishing their annual profits.
The way forward is: explain the context, present the corporate policy and be transparent. We have set out how this might be done in https://corporate-citizenship.com/our-insights/tax-as-a-corporate-responsibility-issue/
I rest my case.