Getting to Good

Manila 2014

What can companies do now and in the future on responsible tax?

A key part of the solution to global poverty entails governments collecting revenues from taxation, including corporate taxation, to fund essential public services to fulfill people’s rights such as healthcare and education, and the public infrastructure needed to raise living standards, increase equality and build well-functioning economies.

Oxfam’s report, Getting to Good – Towards Responsible Corporate Tax Behavior published jointly with ActionAid and Christian Aid, proposes what ‘good’ looks like in responsible corporate tax behavior, and contains a wide range of positive behaviors and actions companies can undertake to go beyond legal compliance and result in significant gains for developing countries.

The paper outlines a range of positive behaviors and actions that companies can undertake towards responsible corporate tax behavior within eight key issue areas: 1) tax planning practices; 2) public transparency and reporting; 3) non-public disclosure; 4) relationships with tax authorities; 5) tax function management and governance; 6) impact evaluation of tax policy and practice; 7) tax lobbying/advocacy; and 8) tax incentives.

Some of these behaviors are immediately implementable and indeed are already being implemented by some companies – such as the governance measure that we highlight in the paper, for companies to develop and publish a tax strategy that is linked to its corporate responsibility strategy and has been approved at Board level.

Other propositions contained in the paper are more ambitious and will require further research and progressive problem solving to put into practice. An example of this is our proposition that companies begin to assess (and address) the human rights impacts of their tax decisions. Implementing this will not be straightforward, and we recognize that a company that takes on this challenge will need to develop methodologies for assessing and measuring the socio-economic impacts of major tax-driven business decisions on employees, shareholders, consumers, tax authorities and the citizens of countries where the company does business.

The spectrum of propositions and examples contained in our paper are not intended to be exhaustive. They are ‘directions of travel’ rather than a prescriptive ‘check list’ of good practices. Not all examples will be relevant and applicable to all companies. With this paper, we are urging companies to approach responsible behavior as an ongoing process of transparency, assessment, and progressive and measureable improvement, in dialogue with a broader range of stakeholders that include its employees, customers and citizens in the places where it does business.

The mission to achieve ‘responsible corporate tax behavior’ will be a challenging but necessary journey which involves a change of culture and capabilities around tax in most companies. Without this, even the best of international tax reform is unlikely to succeed in improving the sustainability and inter-nation equity of corporate tax revenue on which both businesses and citizens depend in the long run. Responsible companies committed to sustainable development and long-term business success will start thinking, acting and talking about this now. And many stakeholders are interested and willing to engage further with companies on this important agenda.