Reuters reported yesterday that a survey conducted by PwC showed that “most chief executives globally would support the publication of country-by-country financial information to help stamp out corporate tax avoidance”. If this finding is a fair reflection of opinion among CEOs, it marks a turning point in the tax transparency debate. (I should add that it seems to have emerged in February, when it was picked up by Christian Aid and Richard Murphy.)
The finding seems to have taken PwC by surprise. Page 17 of the firm’s report reads:
“Similarly, and perhaps surprisingly to some, almost six out of ten CEOs (59%) agreed that multinationals should be required to publish revenue, profit and tax disclosures on a country-by-country basis, although 36% of US CEOs (compared with 19% globally) disagreed. That 59% of CEOs agreed is surprising given what are believed to be widely held concerns that mandatory ‘country by country’ disclosure requirements will focus on data that is costly for businesses to generate and is not easy for the reader to understand. Perhaps this reflects the acknowledgement by CEOs that the provision of some kind of meaningful information on tax is a key part of building greater understanding.”
As this conversation on Twitter suggests, the obvious question is “what were they asked?” I did wonder whether the question might have been interpreted by some respondents as relating to the OECD’s development of a template for country-by-country reporting to tax authorities.
This morning PwC press officer Laetitia Lynn has posted a link to the survey data. If you follow the link to “Purpose”, the final question relates to tax policy and administration, and you will see that 59% of CEOs responding agreed that:
“Multinationals should be required to publish the revenues, profits and taxes paid for each territory where they operate.”
“Publish” is the key word here. CEOs are not tax specialists but I think they know the difference between publishing data and sharing it with tax authorities.
As I noted on the old blog last September, the objection to public country-by-country reporting that we hear most is that disclosure would result in more confusion, not less. On the other hand, many businesses with nothing to hide would welcome greater transparency because it would help to restore trust in big business.