The increasing number of inquiries into the tax practices of corporations demonstrates why a transition towards transparent tax disclosure is urgently required. This was a key message from Elise J Bean, former United States Senate tax investigator, as she addressed an event in London today to highlight GRI’s launch of the world’s first country-by-country public reporting standard for tax. Governments around the world, including several EU countries and Australia, are currently reviewing the tax practices of multinationals.
The GRI Tax Standard responds to concerns over the impact corporate tax avoidance has on the ability of governments to fund services and support sustainable development. It is now available as the latest addition to the GRI Standards, the most widely used sustainability reporting framework.
During 15 years with the Senate Permanent Subcommittee on Investigations, Ms Bean handled high-profile investigations, hearings and legislation on tax avoidance, corporate misconduct and financial corruption. Setting out why global change is needed in support of tax transparency, she said:
“Corporate tax transparency is the next big sustainability task. In 2018, at least 90 hugely profitable US corporations paid no US tax at all – an outrage that is not sustainable morally or in light of the societal investments needed worldwide.
Corporations want better infrastructure, an educated workforce, patent enforcement, trade protection, and more. And some corporations impose enormous costs on society through environmental damage, worker injuries, financial fraud, or worse.
Companies need to pay their fair share, and the new GRI Tax Standard will encourage responsible corporations to do just that. Not only because it’s the right thing to do but because it is in their self-interest to help provide the revenue needed to sustain the economy and restore public confidence in the business world.”
More than 100 people attended GRI’s event hosted at London Stock Exchange, including senior representatives from business, civil society and investment institutions – indicating the high interest from many stakeholders in making transparent tax reporting a reality.
Tim Mohin, GRI chief executive, said: “GRI’s Tax Standard can be a game changer. For the first time, we have a global standard that can ensure companies demonstrate effectively how they contribute through taxes in each of the locations where they operate. This crucial information is needed if we are to have a well-informed global debate about corporate tax practices. I thank Elise J Bean for her insights, which underlines the urgency, international relevance and practical application of the Standard. I think companies themselves are recognizing that changes are needed and GRI looks forward to working closely with them, to encourage uptake of the Tax Standard and help them unlock the benefits that come from committing to transparency.”