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NEWS

CBI President Calls For International Tax Rules To Be Fixed


22/05/2013

The head of the Confederation of British Industry has called on politicians to "fix the rules internationally" on taxation rather than moralize, while also warning business leaders to ensure their tax affairs stand the test of public opinion.

Sir Roger Carr made the comments during a speech on tax and reputation at the Oxford Business School, and as the UK government prepares to host the G8 in Belfast next month. Contrasting international action with unilateral measures, he argued that "independent action can cost competitiveness and cause confusion," and that "hasty solutions or political-point scoring" could have long-term unintended consequences. Consultation with the business world was "critical" to the design process for any changes.

On tax evasion and avoidance, Carr observed that "tax evasion is about the law and about right and wrong in the eyes of the law... If the law is weak, it will be contested; it if has loopholes, they will be discovered; and as flaws are found they must be remedied by a change in the law – not a change of heart."

However, he added that although the CBI supports tax management as a legitimate business practice, it rejects schemes that serve no commercial purpose, and he asked businesses to consider: "if management practice was revealed on the front page of a daily tabloid, would we be ashamed, concerned, regretful; would our brand be damaged?" Risk to reputation was the "best weapon in the armoury in fighting the tax battle."

Carr also drew attention to the amount of tax generated by business: GBP40bn in corporation tax; GBP56bn in National Insurance; GBP26bn in business rates; and GBP13bn in fuel duty, amounting to 30 percent of all tax receipts. For every GBP1 raised through corporation tax, a further GBP3 is raised on other taxes.

www.lowtax.net

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