Corporates waking up to need for greater tax transparency?
In contrast to Christian Aid's report earlier this week (see here), big businesses are becoming more transparent over their tax affairs, according to a new report from PwC.
Almost half (49) of the FTSE 100 now disclose information on their overall approach to tax, a 50% increase on 32 companies that explained their approach the previous year.
Andrew Packman, tax partner at PwC, said: “It's evident that companies are sharing more information about their tax affairs. Increased interest in tax and a desire to build trust with customers, employees and investors are undoubtedly encouraging voluntary tax disclosures.
“Whether we will soon see the majority of FTSE firms disclosing similar levels of detail on tax is uncertain. Tax transparency varies from industry to industry and some investors simply don't demand more information or are mindful of the costs involved. But all businesses should be considering these issues at board level and have an agreed approach to tax transparency. Interest in tax is not going to go away.”
The report also highlights that geographical reporting is now on the agenda of the UK's biggest companies, with a number of mandatory requirements already in place.
Some 22 FTSE100 firms (17 the previous year) now provide some breakdown of taxes around the world, either by region or by country. Eight of these firms are extractives companies, who experience particular interest in where they pay tax, and four are banks, who will soon have to communicate detailed figures as part of the CRDIV transparency requirements.
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