Tax and Transparency
Following the recent June 2013 G8 meeting, it would appear, Governments are aiming, to improve tax transparency and to bring the international tax system into the modern age.
Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the globe. Governments have a responsibility to make proper rules and promote good governance not individuals. Fair taxes, increased transparency and open trade they believe are drivers and ultimately will make a difference by doing the following:
1. Tax authorities across the world should automatically share information to fight tax evasion.
2. Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
3. Companies should know who really owns them and the government tax collectors and law enforcers should be able to obtain this information easily.
4. Developing countries should have the information and capacity to collect the taxes owed them – other countries have a duty to assist them.
5. Extractive companies should report payments to all governments - and governments should publish income from such companies.
6. Minerals should be sourced legitimately.
7. Land transactions should be transparent, respecting the property rights of local communities.
8. Governments should roll back protectionism and agree new trade deals to increase jobs and growth worldwide.
9. Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.
10. Governments should publish information on laws, budgets, spending, national statistics, elections and government contracts in a way that is easy to read and re-use, so that citizens can hold them to account.
They do not mention that governments themselves should review their own spending down to a level at least equal to what they receive from the communities they serve. In business this is called breakeven. The deflection from their inadequacies where they can’t manage the countries affairs to the private enterprise does show lack of leadership to the community and possibly double standards.
No doubt those interested and campaigning to have all UK trading businesses, taxed on profits made in the UK, will watch progress on the implementation of these lofty proposals with interest as most transfer pricing arrangements may have already been agreed by the respective government.