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The UK's tax system is viewed as less fair and less transparent than others around the world, the Association of Chartered Certified Accountants (ACCA) has claimed.
A new report entitled Perspectives on Fair Tax is the result of an international study of finance professionals, which took in six countries: Australia, Canada, Hong Kong, Singapore, the UK and the USA.
The intention of the study was to gauge opinions on tax fairness, complexity, transparency and how well tax authorities communicate with the public.
ACCA members in Singapore and Hong Kong had a positive view of their tax system, believing it to be fair and simple, while the UK- along with Australia and Canada — said their regimes were 'less fair' and 'somewhat complex'.
Quizzed on whether their country's tax regime was transparent, respondents in the UK rated it as the least transparent. They also complained that there are too many taxes in the country, which adds to tax complexity.
British ACCA members remarked that their country's compliance requirements are poorly communicated, and lack of clarity, increasing complexity and a seemingly aggressive stance by HMRC is breaking an already fragile trust of the nation's tax authorities.
The report concludes that trust is crucial for a tax system to work, and a government should create an environment in which citizens believe they have played a part in setting the system and that the system treats them with respect.
In this way, says the paper, more taxpayers will feel inclined to comply, reducing evasion and associated administrative costs.
Chas Roy-Chowdhury, head of taxation at ACCA, commented: 'The report's findings… show that tax systems lag behind the economic cycle, that [they'] simply can't keep up with the pace of change.
'Governments should explore the creation of flexibility in the tax structure to allow for a swift response to changing economic conditions.'
