At a joint IFAC, ACCA, CA ANZ and OECD online event, global and EU experts discussed the main findings of the 2021 edition of the 'Public Trust in Tax' report, focusing on how to enhance the effectiveness, sustainability and fairness of global tax systems.
Public trust is vital to the effectiveness and sustainability of any tax system. It’s central to tax morale, which is the tendency for individuals and businesses to pay their tax voluntarily without intervention by tax authorities. Understanding how the tax system is perceived, and what taxpayers want from it, is therefore key to designing and operating systems which earn that trust.
With this in mind, IFAC (the International Federation of Accountants), ACCA (the Association of Chartered Certified Accountants), and CA ANZ (Chartered Accountants Australia & New Zealand), in collaboration with the OECD, organised a lively panel discussion with renowned experts at the launch of the 2021 edition of Public Trust in tax, focusing on how to enhance the effectiveness, sustainability and fairness of global tax systems.
The expert panelists agreed that fighting tax avoidance and evasion is a key element to create trust in the system. That starts with coordination of legislative actions in order to not create new loopholes. It was common ground that tax is a challenging area for legislators – tax regimes are called upon to do achieve many objectives, encourage certain sectors and behaviours and discourage other sectors and behaviours, which inherently leads to complexity. That in turn can make it even more challenging for citizens to see that the overall shape of the system is appropriate and fit for purpose.
Helen Brand, OBE, Chief Executive of ACCA said: ‘Our joint survey shows that professional tax accountants have the highest level of trust, and that accountants are also seen to contribute to the efficiency of the tax systems by making them more efficient, effective and fair. As the chief executive of a global professional accountancy body, I’m proud to see these results. But there is no room for complacency, and we will continue to engage with key stakeholders - including the younger generation - to support financial education and drive trust in tax and trust in the profession, in the public interest’.
The recent OECD publication Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes shows the importance of law enforcement and professional bodies working together to combat professional enablers of tax crimes and increase public confidence in the financial system.
Paul Tang, MEP and Chair of the European Parliament FISC Committee said: ‘With growing inequality and repeated tax scandals, the social contract on taxation is increasingly vulnerable. To strengthen solidarity and the belief that everyone pays their fair share, the pressure on the private sector is growing. We increasingly expect the private sector to put people and planet on par with profit. Corporates will be expected to disclose their tax information, and tax accountants will be expected to be a driving force behind fair and efficient taxation. Part of this can be delivered by accountants themselves: they should say no to clients when it doesn't seem right. The other part is up to governments and politicians. Regulatory action can help codify the expectations we place on tax intermediaries. Only if we have reasonable expectations of tax advisors, can we truly say that people show trust in their activities.'
Ainslie van Onselen, CEO of CA ANZ added: 'Well-functioning tax systems and high levels of taxpayer trust and confidence are vital, especially in challenging times when tough decisions are necessary. Accountants will continue to need guidance and support from their professional associations, not just with training and professional development, but in setting clear standards for ethical behaviours.CA ANZ, IFAC and ACCA will continue to look for ways to collaborate, not only to get the best outcome possible for stakeholders in the tax system, but to constantly spotlight the vital role accountants play as good citizens in helping design, implement and navigate tax laws, which support community, national and, dare I say, global goals’.
The importance of considering every aspect of the tax system, both what it does and how it does it, came through clearly. Some speakers called for more progressive tax systems, alongside more tax transparency on tax incentives and on companies’ country-by-country reports. There were also calls for clarity of laws, regulations and treaties; effective and efficient dispute resolution mechanisms; and well-resourced tax administrations to encourage compliance and enforce the law in a consistent manner.
Already a rising concern even before the pandemic, the role of taxation in the context of the greening of the economy could play a critical role in the post-COVID recovery. But even in the new Covid-affected world, the old challenge that taxes designed to change behaviour will, if they’re effective, end up eroding their own base has to be addressed.
Kevin Dancey, CEO of IFAC concluded: ‘At IFAC, and through PAOs like ACCA and CA ANZ, we’ll continue to do our part to enhance the effectiveness of the system and support professional accountants in their tax advisory roles. Professional Accountancy Organisations are key. They can set the direction and equip their members, whether they are in government, business or public practice. They can support members, grounded in the Profession’s International Code of Ethics, in delivering their public interest mandate and doing the right thing.'
Notes to editors
The online event can be watched again here: Public Trust in Tax, how to enhance the effectiveness, sustainability and fairness of global tax systems?
The full report Public trust in tax: surveying public trust in G20 tax systems can be read at: https://www.accaglobal.com/gb/en/professional-insights/global-economics/public-trust-in-tax.html
IFAC, ACCA, and Chartered Accountants Australia and New Zealand, have run a series of online surveys between 2017 and 2021, seeking to understand public opinion on a range of tax matters. These surveys reflect the views of over 8,000 people across the G20 countries plus New Zealand - providing a real insight into who they trust and what concerns them – and providing a view of what the public – in other words, taxpayers and voters – actually think. We also organised joint regional roundtables with the OECD bringing together policy-makers and standard-setters, business representatives, NGOs and academics, looking at the issues from an international policy perspective, as well as talking to experts from outside the G20, in Africa and Asia. See press release
About ACCA: ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 233,000 members and 536,000 future members based in 178 countries and regions that upholds the highest professional and ethical values.
We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.
Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.
Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.
About IFAC: The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce. Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies. More information is here www.ifac.org
About CA ANZ: Chartered Accountants Australia and New Zealand represents more than 128,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. We promote the CA designation and high ethical standards, deliver world-class services and life-long education to members and advocate for the public good. charteredaccountantsanz.com