Christian Aid calls on giants to open their books

Christian Aid project

Companies must lift the lid on how much money they make through their
subsidiaries in poor countries, says Christian Aid.

By lumping their profits into one consolidated bundle it is impossible to
work out how much tax multinationals are, or should, be paying, critics say.

The charity has added its voice to that of Dave Hartnett, HM Revenue &
Customs permanent secretary, who has warned the issue was on the agenda of the
UK and several other governments. Hartnett told Accountancy Age earlier this
year that the UK would be pushing for country-by-country reporting. He
emphasised some countries receive more in aid than they did in tax receipts,
despite allowing big multinational to set up shop.

Last week Christian Aid said it has contacted “thousands of its supporters”
asking them to encourage multinationals including Marks & Spencer,
Rolls-Royce, BT and Barclays to respond to a Christian Aid survey about tax and
development. The group has already written to all FTSE 100 companies, asking
them whether they would support the introduction of a new, more transparent
accounting standard.

Country-by-country report­ing would mean “tax anomalies could be more quickly
spotted,” the body said.

Reading between the lines, Christian Aid is trying to call the bluff of big
companies and looking at the numbers it is clear to see why. What Christian Aid
describes as “tax-dodging” by companies trad­ing internationally costs
developing countries some $160bn (£110bn) in lost tax revenue every year,
according to its calculations. The sum is around one-and-a-half times the
foreign aid poor countries collectively receive every year.

Unsurprisingly, companies have dug their heels in on the issue.
Country-by-country reporting would be a heavy burden in terms of annual reports
which already weigh in heavily. However, accountancy standard setters are
mulling country-by-country for the mining industry, so companies may have a
fight on their hands

Read more:

seeks more transparency from FTSE100

Aid aims at tax affairs of football clubs

Related reading