Fair Tax Mark: well-needed benchmarking scheme moves forward

Friday, 21 February, 2014

Fair trade, fair tax - a fair combination, you’d have thought. There was an interesting piece published yesterday over on the New internationalist blog on a new scheme for “Fair Tax” trademarking that serves as a window into the wider issues of justice, development and community relations in both the local and the corporate senses. 

From a development perspective any reduction in tax avoidance and increase in the efficient and transparent management of both tax regimes and tax payments would be hugely positive. That’s a point frequently and well made by subject matter experts worldwide - not only because it could avoid the sort of unproductive stand-offs we’ve reported recently in the extractives sphere, but also because it could remove a lot of inefficiency, corruption and disincentive to best practice currently holding up corporate and national developmental over the world’s emerging economies. A trademarking scheme seems a logical progression; and yesterday, as the NI blog reports, one initiative in this direction took a step forward. 

In the words of the blog post: 

“…on 20 February… Midcounties Co-operative, Unity Trust Bank and The Phone Co-op became the first businesses to be accredited by the new Fair Tax Mark, the world’s first independent accreditation scheme to address the issue of responsible tax. The Mark certifies that a company is making a genuine effort to be open and transparent about its tax affairs and that it pays the right amount of corporation tax at the right time and in the right place. It has been developed by a team of tax justice campaigners (including tax guru Richard Murphy) and a seven-strong panel of tax experts and specialists in corporate social responsibility (CSR) and ethical consumerism.”

Baby steps, but we wish this important initiative the best.

Of course, the debate about tax justice continues. It’s a difficult one for most people to get their heads around (exhibit one: a picture of Starbucks at the head of the NI blog post tellingly and confusingly captioned: “Starbucks has been made to ‘voluntarily’ increase its contributions to HM Revenue and Customs”). Your correspondent is good friends with a number of tax experts, more than one of whom have worked closely with HMRC in past years on reform of UK tax laws, and can vouch from experience that even those at the very heart of the machine aren’t always able to articulate why x. policy move is better than y; many will never understand - perhaps rightly, perhaps not - why Vodafone or Starbucks or whoever else should get away with huge corporate tax let-offs, and the argument about PAYE contributions is often lightweight and really rather rather glib.

However, some things are pretty solid certainties (or so goes our party line, at least): that companies should pat a fair share of tax, and that the notion of “fairness” should be as transparent worked out as possible; and that this need to pay what’s fair is even more pressing in the developing and emerging economies of the world. Building up functioning tax infrastructure and human capacity is key to development and a fair tax standard could be an encouraging move in this direction. 

In the context of the former, there’s a good deal of clear information at the website of the Fair Tax Mark, which we recommend reading. It’s early days yet, but it’s also endorsed by - for example - Robert Hodgkinson, Executive Director of Technical Strategy at the Institute of Chartered Accountants; Chas Roy-Chowdhury, Head of Taxation at the Association of Chartered Certified Accountants; and Margaret Hodge MP, Chair of the UK Government’s Public Accounts Committee.

However: standards are nothing without adoption, and  it remains the work of advocates, companies, governments, NGOs and - fundamentally - consumers to get behind all this. the last couple of years in the UK have seen a rise in consumer dissatisfaction at the tax strategies of megacorporations like Google, Amazon, Starbucks; some defend them, some don’t, but the outcome so far has been some shifting of position (if, perhaps, not by much) by these companies. It’s a marker, if a modest one, of what can be achieved with enough momentum and a loud enough collective voice.



IMAGE: Caravaggio, The calling of St Mathew