Kerry Stares: Why Corporation Tax will Never be Boring Again

By Kerry Stares, Private Sector Advocacy Adviser, ActionAid UK

At a roundtable discussion on responsible tax earlier this week, a senior tax executive wished out loud for the return of the days when corporation tax was boring.

His comment was light-hearted, but neatly captures the current climate. Corporate tax avoidance is scarcely out of the news. As governments struggle to fund basic services, people everywhere are taking an interest in whether companies are paying a fair share of tax where they make profits. For this tax executive, and many others, what was once seen as pure operating cost and technical accounting is now on the agenda of his board and investors as core business risk.

Fixing rules and shifting attitudes

The solution to corporate tax avoidance in a global economy requires fundamental reform of international tax rules. By itself, however, rule change is not a complete fix. For every set of rules, there will be those who work hard, and pay handsomely, to find the gaps and contort themselves to squeeze through them.

A better tax system, therefore, also demands a change in the attitude and approach to tax taken by companies.

Businesses need to recognise, and accept, that a diverse group of stakeholders now has expectations about tax behaviour that go beyond compliance with a complex web of tax rules, replete with loopholes and policed by under-resourced revenue authorities. As the same senior tax executive went on to say: compliance is no longer enough, if the result is seen to be unfair. Robert Phillips in his new book (on the death of corporate spin) makes the same point: it’s no longer enough for a company to ask only “are we doing what is compliant?” without also asking “are we doing what is right?”

Companies also need to recognise (as their stakeholders do) that paying tax is an investment in the countries in which they operate and that tax planning (just like corporate investments, operational decisions and sourcing strategies) has impacts on society for good, or for bad. Responsible companies, committed to making a contribution to sustainable development, must start thinking (and talking) about these impacts, and managing them for the common good.

Tax responsibility in practice

While tax practice is now clearly part of what it means to be a responsible company, there is little agreement about what a responsible approach to corporate tax looks like in practice. ActionAid has just completed a stock-take and analysis, reviewing 45 sources of proposals for responsible corporate tax practice, produced by a range of interested actors.

ActionAid is an international development organisation and therefore our analysis of existing proposals focuses on what is promising, and what is neglected, that is relevant and important to developing countries.

Read our findings in full in our latest report: ‘Responsible Tax Pr.... In consultation with other stakeholders, ActionAid will use the findings of this research as the basis for a Discussion Paper on a Framework for Responsible Tax Practice – to be published soon. 


We hope that the research, and the discussion paper to follow, will encourage more companies to engage constructively in an open dialogue about responsible approaches to corporate tax, starting by communicating more clearly with external stakeholders about their tax strategies and practices. The most responsible (and/or savvy) companies are already doing it, because they see that the genie is out of the bottle. Corporate tax behaviour is set to remain a public interest matter and companies must listen to what people have to say. Tax, unfortunately for some, will never be boring again.

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