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FTSE Giants face Tough Questions on Tax And Financial Secrecy at AGMs this Year
Tax is joining high pay as an issue at FTSE100 companies’ AGMs this year, with Boards facing tough questions about their use of tax havens, financial secrecy and whether – with complex chains of subsidiaries stretching across the globe - they know what is really going on.
Shell and HSBC will both face tax questions at their shareholder meetings this week, as part of a drive by Christian Aid and responsible investment campaign ShareAction to get companies treating tax as part of their wider responsibility to the societies in which they operate.
Glencore, Rio Tinto, Barclays, Schroders and BP have already had to answer questions on their tax planning and reporting this AGM season, while Shell, Royal Bank of Scotland, Diageo, Tesco and WPP are likely to come under pressure on tax at their shareholders’ meetings over the coming months.
Katharine Teague, who will raise tax at this Friday’s HSBC’s AGM, said: ‘We want to get the FTSE100 thinking far more seriously about how their tax practices could affect their reputations and, ultimately, their bottom lines.’
Ms Teague, Christian Aid’s Senior Adviser on the Private Sector, added: ‘It’s no longer acceptable for big companies to aggressively avoid tax, whether in the UK or in developing countries, which we estimate lose some $160 billion a year to tax dodging by multinational companies.’
Louise Rouse, Director of Engagement at responsible investor campaign group ShareAction said: “Reviews of the annual reports of FTSE 100 companies’ Annual Reports shows that far too many companies provide far too little information to enable investors assess the risks arising from tax planning.
‘The positive reaction of some companies to AGM requests for greater transparency calls into question the refusals of others to provide more detailed information on revenues earned and taxes paid.”
Christian Aid has been campaigning since 2008 on how tax dodging harms people living in poverty in developing countries, by depriving them of the funds they need to run vital public services such as schools and hospitals.
The development agency wants multinational companies to reveal much more information about their financial affairs, to help tax authorities, the media and civil society to tell whether they are paying the right amount of tax.
‘Companies which are paying the taxes they owe should be willing reveal more about their finances,’ added Ms Teague.
‘Specifically, we want to see companies reporting data such as the profits they make and the taxes they pay separately for each country in which they operate. This – country-by-country reporting – would make it easier to identify companies which are artificially shifting profits out of the countries where they’re made and into tax havens.’