Tax havens are a huge problem for developing countries. But how do we get the companies to pay their taxes with joy? We have asked this question to some of Denmark’s largest corporations though ‘The Tax Dialogue’ – an innovative initiative that really makes things happen

"Dialogue is the way forward. There is a certain distrust of the tax practices of multinationals, not least because tax is difficult both to understand and to explain. Misunderstandings arise too easily about, for example, tax havens and tax
rebates, if we fail to explain ourselves. This is why we have chosen to help shed light on the debate and take part in The Tax Dialogue," says Annette Stube, Head of Group Sustainability at Maersk Group.

What is it?

We gather the senior tax and CSR executives of some of Denmark’s largest corporations at workshops and conferences. Here we discuss fair and responsible taxation. For example, we have talked about transparency, tax rebates and tax havens. This allows us to become wiser as regards the challenges faced by businesses, while they get a chance to appreciate our views. The project started in 2014 and ends in early 2017, and we have managed to involve some of the
true heavyweights of Danish enterprise, such as Maersk.

Why do we do it?

Every year billions of dollars vanish from developing countries, because multinational corporations in, say, mining or oil-drilling, pay virtually no tax, either because they use tax havens or because they channel the money elsewhere by legal means. Tax revenues forgone could have been spent on schools, hospitals and other basic necessities in poor countries. By entering into a dialogue with the companies, we take a first step towards finding solutions that satisfy both the business community and the populations of poor countries. Tax must not become a kind of secret that is hidden away. It needs to be a duty that is fulfilled and brandished with pride, on a par with a firm’s environmentally and socially responsible profile. Only this will enable us to hold politicians to account for whether tax laws work as intended.

Does it really pay of?

A lot has already happened since Oxfam IBIS began to address responsible tax. Accordingly, we believe the world will look quite different in this regard in ten more years. By then it will be impossible for a business to
justify tax dodging, either to themselves or to society. And those who do not dodge will step forward to show it with pride!

An Agenda Has Been Set

Oxfam IBIS has held six workshops and two conferences in Copenhagen and London, attended by top tax executives from some of Denmark’s biggest multinational corporations and industrial associations. All participants were keen to join in the debate and happy to commit themselves to meeting again. This is a major achievement in itself, since, as recently as a few years ago, tax was something the business community had no interest in discussing with the public at all.

Development Bank

The Dutch development bank FMO has, in consultation with Oxfam IBIS, developed a tax tool, which they use to investigate companies applying for support to invest in developing countries. FMO has, for many years, measured the businesses’ environmental and social footprints in the countries in which they operate, but it is novel for them to also look systematically at taxation. Several other development banks, including the Danish IFU, have begun to examine the tax issue as well, and we are in dialogue with the World Bank about the same. It is crucial to get the development banks on board, since they finance many of the companies that operate in developing countries.

UN Principles

Oxfam IBIS has been in continuous contact with the UN’s Global Compact Office, i.e. the people defining the principles which the world’s leading businesses would like to live up to, as it vouches for their responsible behaviour. We work for Global Compact to incorporate ‘responsible tax’ into its principles. In 2016, they held two webinars on the subject, and one of their sources was a report drawn up by Oxfam together with some of our NGO colleagues. This is a giant leap in the right direction.

 

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