Christian Aid has published a new report this month addressing topical issues surrounding taxation. As an organisation it has blown the whistle more than once on the secrecy and corruption which abounds in the area of tax evasion and which significantly contributes to both the aggravation and promulgation of global poverty and inequality.
Its new report, Accounting for Change 3: Tax and Sustainability: A framework for businesses and socially responsible investors, highlights the taxation concern both in developing and developed countries:
Christian Aid wants to see an end to poverty, everywhere. One of the ways that we believe this can be achieved is through equipping developing countries to collect a fair amount of tax from the companies operating within their borders, enabling governments to pay for essential services for poor communities… Corporate tax payments are an increasing area of concern for civil society and companies alike. In the face of austerity measures, grass roots groups in the UK and US are challenging companies on perceived tax avoidance schemes.
The human tendency to hoard and build bigger and better “storehouses” is rooted, at least in part it seems to me, in fear; fear of that proverbial “rainy day” when extra resources will supposedly be needed to offset adversity in some form or other. This is an ancient problematic and one which Scripture addresses in a number of texts. Notably, the Israelites, fleeing from slavery in Egypt, had to be re-programmed out of just this fear which, arguably, had become a compulsive one under the increasing harshness of life in Egypt. Their fear of lack and scarcity was tested in the wilderness where they had to re-learn a paradigm other than hoarding: one of sufficiency, community-sharing and trust. They had to learn to collect the manna for each day.
Finding contentment in sufficiency, it seems to me, is a vital bridge over the abyss of compulsive hoarding provoked by the fear of insufficiency and its bitter and ugly relative, greed. Sufficiency is a core element of the faith-based vision for an economy of equity, as described in the Old Testament and re-emphasised in the Gospels.
Today, this fear of insufficiency is one which has grown and enveloped whole nations under the modern paradigm of self-sufficient individualism aided and abetted by the evolutionary ‘survival of the fittest economics’ of post- Washington consensus capitalism. Tax avoidance and its illegal cousin, tax evasion, are but logical outcomes of a system which encourages fear-based hoarding in the form of growth in profit margins and minimised outgoings. Of course the transfer of benefits to shareholders as opposed to inept or corrupt governments is a consideration which Christian Aid addresses in the report:
Conventional wisdom suggests that minimizing tax is always in the interests of the shareholder. However, an analysis of firm-level data provided by companies, to test the extent to which tax avoidance serves shareholder interests, suggests a complex picture. The simple view of corporate tax avoidance as a transfer of resources from the state to shareholders is incomplete. This complexity may result in part from the risks that tax avoidance pose to a company-most notably compliance risk (increased likelihood of expensive and protracted disputes) and reputational risk-which come with taking aggressive tax positions.
Christian Aid defines tax avoidance in the report as, “taking a tax position that is legally compliant but undermines the tax administration and that is not in the spirit of the law or respectful of the intentions behind it”, while tax evasion was described as “undermining the mechanism used to collect tax”.
In his recent blog, Richard Murphy, director of Tax Research UK and advisor to the Tax Justice Network, in reference to the current Occupy London protests, notes that, regardless of the potentially substantial losses in tourist revenue (which he aptly describes as a ‘camel through the eye of the needle’ test), St. Paul’s Cathedral‘s primary task, as a centre of Christian witness, is to promote the enacted values of Christian faith and support the protest of Occupy London. He says, “the message of Occupy is simple (even if the delivery will be complex); it is about defending the 99% from the abuse of the 1%. In that case this is a movement that sides with the poor against the rich [who] He will send empty away.”
The burden of Christian witness, Murphy asserts, referencing the late Rt Rev David Sheppard’s book “Bias to the poor” is indisputably one which resonates with Mary’s words in the Magnificat, so beloved in Anglican liturgy:
My soul magnifies the Lord……,
He has shown strength with His arm:
He has scattered the proud in the imagination of their hearts.
He has put down the mighty from their thrones,
and exalted those of low degree.
He has filled the hungry with good things;
and the rich He has sent empty away