Corporate Social Responsibility and Tax Justice

Last night I attended a very interesting lecture at Trinity College Dublin, entitled A Fairer Global Tax System: Developing World and National Perspectives. Given by David McNair (Christian Aid) and Sheila Killian (University of Limerick, the most engaging element was when the speakers were faced with some difficult questions from those in attendance. Needless to say, the answers were typical of such experienced speakers and quite insightful. For those interested in learning more about the subject discussed, some materials are available on the college website.

Earlier in the lecture however, Ms Killian briefly touched on the subject of tax justice and Corporate Social Responsibility (CSR). I would have welcomed a more in-depth discussion of this as for years CSR has been the battlefield of environmentalists and human rights activists who have tried (with some success) to ensure that multinational companies act in a socially and environmentally responsible manner with regard to local communities.

If tenets of tax justice were ingrained into CSR policies, the unfair resource flow from 'South' to 'North' would be hampered and governments in the developing world would have a greater amount of income to spend on health, education and other essential services. Furthermore, when the business community takes positive action world leaders tend to follow suit and cement such moves through various international treaties. By adopting (albeit voluntary) tax justice mechanisms to prevent the immoral use of tax havens and transfer pricing as part or their CSR policies, multinationals could give governments the push they need to work towards a fair global tax system.

However, given the discussion last night of the amounts of money generated by a manipulation of tax systems, it will probably be a long and difficult fight to encourage/force multinationals and certain governments to play fair.