Try to proclaim instead of shame on tax

24 May 2016

I don’t need to remind you of the debates that we’ve been having in Australia about taxation and budgets and deficits and the economy.  The Australian economy has a big budget deficit, which governments seem unable to rein in.  But critics also argue that many corporations and big companies, especially giant foreign multinationals, pay no tax at all, despite making massive profits.

There’s been some loud calling out for governments to crack down on multinationals like Apple, Google, Ikea, and countless others over perceived failures to pay their fair share of tax.  People seem to believe in the idea of naming and shaming them.

But I’m inclined to wonder whether we should try a different approach on corporations and tax.  Should we try a positive approach, instead of a negative one?

I know somebody who suggested more of a positive approach on this issue.  Instead of naming and shaming those corporations who don’t pay their fair share of tax, why not try naming and proclaiming those who do?

I can’t help wondering whether giant foreign firms, if they feel that the integrity of their operations in Australia is being questioned, might be so annoyed that they might threaten to shut down their Australian operations.  I might be drawing a long bow, but no company likes having its reputation dragged through mud.  And if they shut down their Australian operations, how many Aussies would be out of work?  Might the negative approach of naming and shaming end up being counterproductive?

Perhaps the power of positive publicity might make a difference.  There are many companies out there with reputations for being good “citizens”, for want of a better term, as far as what they do for customers and communities is concerned.  Wouldn’t a giant corporation like to be promoted for paying its fair share of tax, rather than engaging in massive tax avoidance?

Such proclamation should only be possible through a body like the Australian Taxation Office.  You can’t “buy” the approval of such a body.  If the ATO believes that companies are paying their fair share of tax, it should be free to say so.  What might be worth a kind of public register on which major corporations would be listed, as long as the ATO deems that they’re paying their fair share of tax?

And given the power of social media these days, especially when it comes to putting word out about anything, whether bad or good, how good would it be for corporations to be lauded for refraining from practices that most people regard as unethical or disgraceful?

Maybe we should try to proclaim instead of shame corporations, particular big ones, in relation to tax, so that we know who’s not “robbing” the country of due tax revenue.