Article by Georgia Stamatelou, Partner, Head of TAX, KPMG at Business Partners magazine.
Tax, at its most fundamental level, is the price we pay for a civilized society. Trust between all stakeholders and players in this social contract is based on the foundation of responsible tax. Responsible tax behavior should therefore be an integral part of all socially responsible businesses that seek profits while maintaining society’s trust and citizens’ respect.
Advances in globalization and digitalization however, have created unstable conditions: when money flows freely across borders and legislation struggles to follow, it can result in mismatches and ‘legal’ loopholes that are complex to the point of opacity. At the same time, in the world of social media, the free flow of information has made public suspicion and scrutiny all the more intense: citizens and society have the tools to hold businesses accountable. Therefore, in the interest of getting the global tax system to work we need to get a better consensus on what responsible tax behavior looks like.
Businesses can no longer expect to receive public support just by stating that what they do is within the strict letter of the law – they must also consider the context in which we all live and operate. Tax remains a legal duty, but in the court of public opinion, it also has a clear moral or ethical dimension. It is in the court of public opinion that solutions have to be negotiated, not imposed.
To achieve this, we believe that an open and honest global discussion is required. An informed, collective conversation, reaching the heart of Tax as a concept, and played-out against a global economy, would have a wide-reaching potential to change the way we think about taxation and therefore the relationship between business and society. In other words, it would set the foundation for restoring public trust in the tax system.
At KPMG we feel it is now vitally important to have a meaningful discussion about all the key issues relating to globalization and taxation. On this basis, we introduced in 2014 and we continue to sponsor the Responsible Tax Project. Through this platform we have invited a range of stakeholders, including taxpayers, academia, media, government, global bodies, politicians and NGOs, to share our thinking on what responsible tax behavior looks like in a global context. Our goal is to work together to create the framework for responsible global tax behavior, action and advice. From thereon, we hope to articulate a shared understanding of how responsible tax at a global level works across corporations and tax jurisdictions for the developed, and especially, the developing worlds.
Through our Responsible Tax project, KPMG is pleased to lead and host the debate, recognizing its importance for issues not only of global tax, but also of public trust and confidence in business. We appreciate that there are no easy answers, but we hope that others are ready and willing to participate and assist in further developing thinking around Responsible Tax behavior. So join us at #ResponsibleTax.
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