I am taking part in a conference in the EU parliament marking the anniversary of the Panama Papers today. I am talking about the role of country-by-country reporting in tackling illicit financial flows. These are my slides:
Tackling illicit flows: Country-by-country reporting
- Richard Murphy
- Professor of Practice in International Political Economy: City, University of London
What CBCR is
- CBCR is accounting data: it is not tax data
- CBCR shows what a multinational corporation does in each country in which it operates
- It does this by publishing:
- An abbreviated income statement including sales, profit and tax information
- Some employment data
- Limited cash flow data
- Some balance sheet information
- And some narrative explanation (hopefully)
- This permits a tax risk assessment
- But more importantly it is about holding global corporations to account locally
What CBCR does
CBCR changes:
- The way we look at multinational corporations:
- They are not monolithic entities but a patchwork of local enterprises that are integrated into something bigger than the parts
- The way that multinational corporations account:
- Their responsibility is no longer just to shareholders but to all their local stakeholders as well
- Our understanding of tax:
- Taxes are not a lump sum paid by one multinational company but are the sum of all the individual payments made in a great many places, and we have to understand them all
- Corporate behaviour:
- What we measure counts. If multinational corporations have to account locally it will change their behaviour in those places
Why CBCR will work
CBCR will work because:
- It exposes who uses tax havens:
- And no one enjoys that now
- If MNCs know that their tax abuse can be exposed by CBCR they will change their behaviour:
- No one wants to be shown to be cheating
- It is easy to use:
- And the work I am doing at City, University of London (and with others) intends to make that easier still
- MNCs will know they can be held to account locally:
- They will improve their local performance to meet stakeholder expectations as a result
April 26, 2017 at 12:09PM
from Richard Murphy
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