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Carr: corporate tax planning is about “responsible judgement”
The head of the UK’s leading business lobbying group has backed the use of corporate tax planning, urging the government and its G8 partners to “avoid the moral debate” about avoidance.
CBI president Sir Roger Carr also warned politicians against creating unintended consequences by instigating hasty solutions to settle public concerns about legal tax dodging.
“Tax avoidance cannot be about morality,” he claimed in a speech to Oxford Business School yesterday. “It is about responsible judgement, finding the balance between shareholder fiduciary duty, stakeholder responsibility, social awareness, and corporate reputation for acceptable behaviours.”
Carr insisted that big business ought not feel it has to pay additional revenue to HMRC to be accepted by the general public. “Tax should not be viewed as a down-payment on social acceptability,” he said, extolling “non-abusive tax management as a perfectly normal and legitimate business practice”.
But he rejected avoidance schemes that “serve no commercial purpose other than the minimisation of tax” and said tax planning should be “neither aggressive nor lax, and [be] respectful of corporate obligations to the society in which the company operates and serves”.
With avoidance expected to be high on the agenda of the 39th G8 summit next month, the CBI boss offered recommendations to Europe’s leading politicians.
“First, avoid the moral debate; it’s all about the rules. Second, fix the rules internationally, not unilaterally; independent action can cost competitiveness and cause confusion,” he said, adding that careful consultation with the business world will be a critical part of the process.
“As politicians pursue fairness, it is important that criticisms are grounded in fact, and [that] hasty solutions or political point-scoring do not trigger long-term unintended consequences.”
