Transparent tax system must be a priority for all countries

18 June, 2013

Transparent tax system must be a priority for all countries, says ACCA

An open, transparent and userfriendly tax system will benefit taxpayers – individuals as well as businesses who currently face a mountain of tax rules which obscures who pays what taxes, says ACCA (the Association of Chartered Certified Accountants) following the G8 conference discussions on tax avoidance this week. ACCA says that the complexity of some tax regimes blurs the line over what taxes business and individuals should be paying when a more open, simple system would make it easier for taxpayers and the tax authorities to understand and collect tax respectively.

Chas RoyChowdhury, ACCA head of taxation, said: “A transparent, userfriendly tax system is something we all want and is an aspiration all tax regimes should strive to achieve. Professional bodies, such as ACCA, have a part to play in liaising with policy makers in developing a tax system that is open and simple so that the affairs of corporations and individuals are visible. The benefit of a more open tax system is not only to see who pays what, which was the topic of discussion at G8 this week, but also to help people and businesses understand why they are paying certain taxes.

“Currently, in Australia and New Zealand as well as many other markets, there are too many rules and laws on tax, but it needs to be kept to a minimum to help overburdened small businesses and entrepreneurs and help make the system more open. Complex tax regimes blur what should be an easy to understand system.”

Duty to pay more tax?

ACCA says that the issue of whether there is some duty to pay more tax than the law requires is one which governments and legislators will be hard pressed to legislate for.

Chas RoyChowdhury added: “Whether or not there is duty to pay more tax goes to the heart of the public and media debate going on around this issue of everyone paying their “fair share”. A recent case in Canada’s Federal Appeal Court saw Justice K Sharlow say that it was not ever necessary to evaluate the morality of a taxpayer’s conduct where they had abided by the tax laws, in that case the Income Tax Act. Accountants’ first duty is to put their client’s interests first and as long as they act within the law they will look to advise in a way that puts their client in the most advantageous economic position.

“It is hard to see how any government could legislate to the counter that and instil a moral duty to pay more tax than the law requires them to pay. Legislating for what is a morally acceptable amount to pay beyond that required by law would be a challenge for legislators the world over, the same legislators who have made it possible, by law, to reduce an individual’s or company’s tax bill.”

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