Corporate tax avoidance is an open secret in the world of multinational enterprises. Hiding behind loose laws and revenue reporting standards around the globe, these international corporations obscure profits and losses to a degree that costs the nations where they do business billions of dollars in annual tax revenue, many of it in developing countries that badly need that lost income to improve their infrastructure.
In its ongoing quest to promote greater standards and accuracy in the areas of corporate revenue reporting, Global Financial Integrity (GFI) recently partnered with several leading international financial transparency organisations to cohost Global Investors Making Transparency Possible, a digital conference featuring an array of renowned experts in the fields of tax, transparency and illicit financial flows.
GFI was joined by Finance Norway, Storebrand, NORSIF, KLP and PWYP (Publish What You Pay) Norway in hosting the event, which was based at Oslo Metropolitan University, which was also a co-host, but saw most of its speakers appear remotely because of the Covid pandemic.
The forum's panelists represented multiple sides of the financial industry including banks, investment houses, consulting firms, the public sector, advocacy think-tanks and civil society. With an emphasis on creating a standardized means of disclosing comparable financial data (Quality of Information) and ensuring that said information is trustworthy and universally accessible for the benefit of both investors and society as a whole (Quality of Reporting), the conference gathered key stakeholder organisations to discuss the direction, quality and development of policy interventions.
This conference brought together and highlighted global advocacy as well as industry and investor community efforts to ensure that corporate tax information is trustworthy, intelligible comparable but is also accessible and allows for automated collection and treatment.
Among the speakers was GFI's Policy Director, Lakshmi Kumar, who made the case for quality in reporting standards. "Increasing tax transparency through public disclosure will force companies to clean up the most questionable tax practices" and that " the GRI standard requires companies to provide limited amounts of data that provide an accurate snapshot of a company's tax strategy while not creating overly burdensome accounting requirements."
The forum was divided into five sections, starting with a pair of keynote speakers. Carine Smith Ihenacho, Chief Governance Officer of Norges Bank Investment Management spoke about expectations for tax and transparency while Grace Perez-Navarro, Deputy Director, Centre for Tax Policy and Administration, OECD who gave a presentation about transparency challenges in the global economy.
Those speeches were followed by four separate panels.
What is the Risk of Not Knowing About Tax and Transparency, which featured several speakers from prominent banks and investment groups and discussed both the risk to an investor's portfolio and to society at large because of tax avoidance.
What is Quality of Information (going into the reporting)? Featuring a mix of speakers from consultants and NGOs, this panel discussed what investor can do to try and control risk related to tax and transparency.
What is Quality of Reporting? (coming out of the reporting), this panel featured GFI's Kumar along with representatives from the for and non-profit world.
And finally, What Are Success Stories of Companies on Tax and Transparency, which featured a pair of representatives from multinational extraction companies discussing their commitment to information transparency and being a corporate leader.
"GFI is honored to have partnered with critical stakeholders in the campaign to identify robust standards around tax transparency and look forward to continued engagement in moving towards increased public disclosure on tax," said Kumar.