Tax as a Corporate Responsibility Issue

Tax is becoming a major issue in corporate responsibility that presents fundamental risks to multinationals. The traditional defence of compliance is dead; the distinction between evasion (illegal) and avoidance (lawful) has dissolved in the eyes of governments, NGOs and citizens. Politicians, campaign groups and the media have seized on tax as a topical issue in tough economic times. Companies such as British American Tobacco, McDonald’s and ExxonMobil have embraced new approaches to tax.

Corporate Citizenszhip believe that companies need a new approach to manage and communicate tax effectively. For most companies, this does not, in essence, involve paying more tax. It does require companies to identify a coherent and credible position on tax and find a language to defend it.

Businesses with a reputation to defend will need to explain how paying the right amount of tax, consistently and in the right places, is in the longterm interests of both their shareholders and society.

Corporate Citizenship has identified the different types of tax policy and the implications of this debate for businesses. Read this report here.