This summer KPMG proposed such standards in a document entitled Developing a Common Framework for Disclosing Tax Information. This they are now proposing should be the basis for wider discussion at a meeting on 10 December organised by the Covi think tank, which they fund. I will be attending, but I can say in advance I have three considerable difficulties with what they suggest.
First they say:
A prescriptive ‘one size fits all approach’ is not the right way to proceed with transparency.
Or to put it another way, they are not committed to a framework, let alone a standard, and are instead saying that whatever a company wants to disclose is good enough. I clearly do not agree: that fails any test of what is good accounting.
All right then. The statement is that there must be just the one system for all. Maybe that’s right, maybe that’s wrong, but at least we know where the Murphaloon is coming from, one size must fit all.
And then we get the Murphmonster’s own suggestions:
Tax Reporting Standards should cover:
Government reporting on taxation;
This paper only covers large company disclosures and suggests that TRS be issued to cover required disclosure on:
What each component of the entity does;
The entity’s attitude towards tax, risk and lobbying;
Quantifiable tax risk;
That is, one size does not fit all and we need different rules for large and small companies.
It’s quite something to switch in only a few paras, isn’t it?