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Tax, stakeholder expectations and corporate reputation
Deloitte’s approach to the tax avoidance debate is to engage in the discussion in order to make a positive contribution and move it forwards. To achieve this, we recognise that there is an issue to address – namely that some significant parts of society have recently come to feel that the tax strategies of big business are leading to unfair outcomes. This contributes to a sense of distrust in large business, and through that, distrust of their advisers, including the big accounting firms. Given that this distrust may be damaging to business confidence and business certainty, which we consider vital to the success of the economy and wider UK society, we want to help by taking action to make positive changes.
In order to address the issues of confidence and perception, we are contributing by participating in a review of the international tax system (the OECD BEPS initiative) as we believe these historic rules, principles and policies are the primary drivers of the outcomes perceived as unfair. We are also seeking to suggest ways in which business can respond to the environment by advocating new ways of managing and communicating their tax strategies.
In 2015 we wanted to take steps to understand evolving expectations from a wide range of parties with an interest in corporate tax outcomes, to inform our strategy further and to help us engage with our people, clients and society more generally. Aware of our own interest in the debate, Deloitte approached Henley Business School to encourage them to help progress the debate through applying their expertise and eminence on matters of corporate behaviour and reputation.
The key findings of the report were that:
- Taxation of corporates is an important issue and part of a broader question of public trust
- The state of the tax system is significant for achieving fairness, and governments are responsible for it
- Demands for increased transparency remain
- Financial markets appear to be relatively indifferent to tax information – good or bad