The so-called Paradise Papers have put tax firmly back on the global media and political agenda. Over the last three days, we’ve seen a succession of stories highlighting how individuals and corporations have been able to take advantage of different tax jurisdictions around the world. Journalists and politicians alike are again calling for co-ordinated global action to stop this sort of behaviour which, they argue, undermines governments and public finances.
We live an increasingly complex world where trade and capital flows freely. It is clear that domestic and international rules on tax have got out of line with current ways of doing business. The G20 and the OECD have done an enormous amount in recent years to increase transparency and reconfigure domestic and international tax rules. But there is clearly more to be done, especially with the need of national governments to update their laws.
We have been very clear that we expect our members wherever they are based to uphold the highest ethical and professional standards when it comes to tax advice, in line with our ethical code. Our Professional Conduct in Relation to Tax (PCRT) sets this out in more detail. Other professions need to be challenged to abide by similar guidance.
But the furore over the Paradise Papers has highlighted another issue and it is one of trust. Some would argue that only complete transparency of corporate and trust ownership will provide the necessary sunlight for the secrecy that allows such behaviour. Others would suggest that if there are strong agreements in place between governments to share information between their respective tax authorities, then that is sufficient. I have no doubt that this debate will continue to rage over the coming weeks.
Whatever your view, there is one thing I think we all agree on - that individuals and companies who take advantage of any country’s public services have a responsibility to pay tax in those countries that fund those services.
Thanks, fellow members for speaking up. I am glad Michael and the ICAEW have spoken up too and look forward to hearing more about the education plan to support the roll out of PCRT, about us holding members to account where we need to, and about speaking up to try and help promote public understanding and the public interest.