Representatives from ACCA have given evidence to the Committee for Banking Standards Panel on tax, audit and accounting on the topic of banking tax practices. ACCA does not believe that the tax system itself is to blame for excessive leverage in banks. It is rather a failure of management to properly recognise and address the risks which are inherent in any system.
The panel was formed by the Parliamentary Commission on Banking Standards (PCBS) and is being chaired by Lord Lawson, former Chancellor of the Exchequer. The aim of the panel is to gather evidence for the PCBS on topics such as the tax conduct of banks and the application of International Financial Reporting Standards. ACCA was invited to offer verbal evidence to the panel following its written submission in response to a call for evidence made on 4 December 2012.
In respect of imposing a special tax regime on banks, Chas Roy-Chowdhury, Head of Taxation at ACCA, commented about ACCA’s written submission:
'We do not think it is appropriate to think of using the system as a tool for imposing specific cultural or moral frameworks on particular types of businesses.'
However, ACCA agrees that issues of culture and value should be of great importance to any business, 'From the perspective of corporate governance rather than the tax system.'
ACCA believes that the tax system should be as simple and consistent as possible for all taxpayers.
'The simpler the system and the fewer the differential levels of taxation available within it, the less will be the incentive to ‘plan’. If the system is complex then advisers and intermediaries can, and indeed must, be aware of all the alternatives within it.'
Nonetheless, there is a place for proportionate and confidential monitoring mechanisms to ensure appropriate corporate governance in relation to tax compliance.
The panel also received written evidence from ACCA on International Financial Reporting Standards. Chas Roy-Chowdhury concluded: 'In our view financial reporting standards and principles did not cause the financial crisis. However accounting standards and the quality of their application should both be re-considered as to whether there are improvements that could be made arising from the crisis.'
Overall, ACCA considers that the adoption of IFRS has improved and promoted transparency in financial reporting.
- ends -
For more information, please contact:
Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
Notes to Editors
- About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants with 154,000 members and 432,000 students in 170 countries worldwide. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
We work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development.