2020 got off to a good start for responsible taxation: in mid-January, the Global Reporting Initiative (GRI) launched its tax standard. Even if voluntary, the standard is supposed to plant the seeds of transparency for companies, encouraging them to disclose crucial information about their approach to tax – disclosures that would not surface by simply applying international accounting rules.
Then, COVID-19 hit. And once again, governments have had to step in. This time assistance would be required not just by financial-sector firms, but possibly vast swathes of the entire economy.
As taxpayers pick up the tab, momentum will grow for a zero tolerance approach to tax avoidance. Bailouts (or any form of corporate welfare) will make stakeholders - responsible investors in particular - question whether companies are contributing their fair share to the public coffers.
Professor Prem Sikka, accounting scholar and veteran tax expert, tells RI: …