Fair risk

Fair risk

Public perception about the amount of tax paid by business has made tax a global issue for multi-national companies, according to the results of a PricewaterhouseCoopers poll. It is no longer just tax authorities, but customers, pressure groups and other stakeholders, including analysts, who make judgments about whether a company pays a 'fair amount' of tax. As a result, the boards of multi-national companies now recognise that a clear tax strategy is integral to their business strategy.
76% of tax directors from European based multi-national companies who attended the annual PricewaterhouseCoopers Global Tax Symposium said that they are working towards having a clear tax strategy embedded in their business. However, companies are approaching tax strategies in different ways and with varying degrees of risk. The findings indicate that tax directors are aware of how internal and external stakeholders may perceive their companies according to the tax strategy they implement. 84% of respondents make some decisions about how their companies manage tax risk based on the importance of different stakeholder groups.
Angus Johnston of PricewaterhouseCoopers says that 'tax risk management is about making appropriate choices to manage a company's effective tax rate; striking the correct balance between a company's approach to tax risk and the consequences, namely how stakeholders might respond'.
Combined with a steady increase in the complexity of tax laws and a growing demand from governments on tax compliance, respondents indicated that the focus of their roles has changed recently so that tax directors have to 'articulate appropriate tax strategies for their businesses, design appropriate controls and identify areas of risk and how to manage them'.

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