IS CORPORATE TAXATION PRACTICE A CSR ISSUE? · 2015-03-02 · 1 IS CORPORATE TAXATION PRACTICE A...

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IS CORPORATE TAXATION IS CORPORATE TAXATION PRACTICE A CSR ISSUE?PRACTICE A CSR ISSUE?

Prem SikkaPrem SikkaCentre for Global AccountabilityCentre for Global Accountability

University of Essex ([email protected])University of Essex ([email protected])

Association for Accountancy & Business Association for Accountancy & Business Affairs (Affairs (www.aabaglobal.orgwww.aabaglobal.org))

ESRC Research Seminar Series ESRC Research Seminar Series York Management School, 25 March 2009York Management School, 25 March 2009

http://www.aabaglobal.org/

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Corporate Social Responsibility and Tax AvoidanceCorporate Social Responsibility and Tax Avoidance

Corporate Social Responsibility (CSR)Corporate Social Responsibility (CSR): A : A Relationship between power, responsibility and Relationship between power, responsibility and accountability. accountability. Variety of theoretically grounded approaches. Variety of theoretically grounded approaches. Most approaches suggest that Corporations Most approaches suggest that Corporations --should make a positive impact on society and the should make a positive impact on society and the environmentenvironmenttake responsibility for the impact of their conduct take responsibility for the impact of their conduct on a variety of stakeholders.on a variety of stakeholders.behave ethically, fairly, improve economic/social behave ethically, fairly, improve economic/social development, quality of life.development, quality of life.CSR not constrained by legal requirementsCSR not constrained by legal requirements

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Corporate Social Responsibility and Tax AvoidanceCorporate Social Responsibility and Tax AvoidanceSome ProblemsSome Problems::Can companies ever be socially responsible?Can companies ever be socially responsible?Shareholder v Social interestsShareholder v Social interestsLegal requirement to prioritise shareholder Legal requirement to prioritise shareholder interestsinterestsDirectors owe a Directors owe a ‘‘duty of careduty of care’’ to the company. to the company. Stakeholders?Stakeholders?Markets exert pressures to increase profitsMarkets exert pressures to increase profitsExecutive rewards related to published profitsExecutive rewards related to published profitsRegulatory capture or dilution?Regulatory capture or dilution?Power and politics of accountability, Power and politics of accountability, responsibility, enforcement?responsibility, enforcement?Globalisation: Corporate Power and the RaceGlobalisation: Corporate Power and the Race--toto--thethe--Bottom.Bottom.

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Companies attempt to build CSR legitimacyCompanies attempt to build CSR legitimacyCorporate Philanthropy: McDonaldsCorporate Philanthropy: McDonaldsSponsorship of Awards: Sponsorship of Awards: Reebok Human Rights AwardsCause related marketing: Tesco and school computersSocial and Environmental ReportingEco EfficiencyCommunity Investment; Ethical InvestmentCodes of Conduct: Voluntary?Codes of Conduct: Voluntary?Can they buck the systemic requirement to increase Can they buck the systemic requirement to increase shareholder wealth?shareholder wealth?How about paying taxes?How about paying taxes?

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Tax Revenues are essentialTax Revenues are essential for for functioning of the state and societyfunctioning of the state and society

Redistribute wealthRedistribute wealthAlleviate PovertyAlleviate PovertyInvestment in social infrastructure Investment in social infrastructure Finance public goods: healthcare, Finance public goods: healthcare, education, transporteducation, transportSupport CapitalismSupport CapitalismSocial developmentSocial development

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Organised Tax Avoidance is widespreadOrganised Tax Avoidance is widespreadUSUS loses over $345 billion of tax revenues each year.loses over $345 billion of tax revenues each year.

19981998--2005: 2005: 66% of the domestic and 68% of 66% of the domestic and 68% of foreign corporations did not pay any federal foreign corporations did not pay any federal corporate taxes corporate taxes 19961996--2000: 2000: 61% percent of the US domiciled 61% percent of the US domiciled corporations paid no federal income taxes corporations paid no federal income taxes 19961996--2000: 38% of the large companies paid no 2000: 38% of the large companies paid no taxes during the fivetaxes during the five--year period. year period. Major US companies also avoid paying state taxesMajor US companies also avoid paying state taxes

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UKUK loses between loses between ££97 billion 97 billion -- ££150 billion of tax 150 billion of tax revenues each year.revenues each year.NAO Study: Of the 700 biggest companies NAO Study: Of the 700 biggest companies -- 220 220 companies paid no corporation tax in 2005companies paid no corporation tax in 2005--2006.2006.A further 210 paid less than A further 210 paid less than ££10m each in 200510m each in 2005--2006 2006 Almost 70 per cent of all UK corporation tax in the Almost 70 per cent of all UK corporation tax in the 2005/6 financial year was paid by just 50 companies. 2005/6 financial year was paid by just 50 companies. ONS ONS –– Massive icnrease inc orporate profits.Massive icnrease inc orporate profits.Corporate tax take is around 3.2% of the UK GDP.Corporate tax take is around 3.2% of the UK GDP.

Tax burden shifted to labour and consumption and Tax burden shifted to labour and consumption and savings.savings.

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Developing CountriesDeveloping Countries-- illicitillicit outflows to developed outflows to developed countries countries -- $1 trillion$1 trillionTax revenues lost Tax revenues lost -- $500 billion each year?$500 billion each year?Third World annual debt repayments = $340 billion Third World annual debt repayments = $340 billion to service a $2.2 trillion debt.to service a $2.2 trillion debt.The Millennium Development Goals (MDGs): targets The Millennium Development Goals (MDGs): targets (by 2015) to eradicate extreme poverty and hunger, (by 2015) to eradicate extreme poverty and hunger, achieve universal primary education, environmental achieve universal primary education, environmental stability, reduce child mortality, improve health, stability, reduce child mortality, improve health, gender equality and combat diseases. gender equality and combat diseases. Overseas Development Aid is about $100 billion.Overseas Development Aid is about $100 billion.G8 do not force western companies to pay their G8 do not force western companies to pay their taxestaxesCrackdown on tax havens. Agreement with OECD Crackdown on tax havens. Agreement with OECD countries countries –– no mention of developing countries.no mention of developing countries.

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Vehicles/Tactics for Tax Avoidance/EvasionVehicles/Tactics for Tax Avoidance/EvasionComplex Corporate Structures: Enron, WorldComComplex Corporate Structures: Enron, WorldComTax Holidays: Footloose capital.Tax Holidays: Footloose capital.Power of Corporations: Tax SweetenersPower of Corporations: Tax SweetenersIncome Shifting: Tax HavensIncome Shifting: Tax HavensTransfer (Mis)Pricing: Royalties, interest payments, Transfer (Mis)Pricing: Royalties, interest payments, management charges, costs, logos, trademarks. management charges, costs, logos, trademarks. 60% of the global trade in internal to corporations.60% of the global trade in internal to corporations.ReRe--invoicinginvoicingSpecial Purpose VehiclesSpecial Purpose VehiclesCharitable TrustsCharitable TrustsShell CompaniesShell Companies

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Corporate Social Responsibility and Tax AvoidanceCorporate Social Responsibility and Tax AvoidanceDel Monte Fresh Produce UK, Chiquita UK and DoleDel Monte Fresh Produce UK, Chiquita UK and Dole’’s s UK business, JP Fresh, report combined sales in the UK business, JP Fresh, report combined sales in the UK of over UK of over ££400m in their 2006 annual accounts. 400m in their 2006 annual accounts. Combined UK tax = Combined UK tax = ££128,000. 128,000. Transfer Pricing Transfer Pricing -- ££1 of Sale split as follows:1 of Sale split as follows:Home country 13 p= 1.5p labour+10.5 p costs+1p Home country 13 p= 1.5p labour+10.5 p costs+1p profitprofit8p to Cayman for use of the 8p to Cayman for use of the ‘‘purchasing networkpurchasing network’’;;8p to Luxembourg for use of 8p to Luxembourg for use of ‘‘financial servicesfinancial services’’;;4p to Ireland for 4p to Ireland for ‘‘use of the branduse of the brand’’;;4p to the Isle of Man for insurance;4p to the Isle of Man for insurance;6p to Jersey for management services;6p to Jersey for management services;17p to Bermuda for 17p to Bermuda for ‘‘use of the distribution networkuse of the distribution network’’;;Retailer margin 39 p; Retailer margin 39 p; Corporate profit in the UK = 1p; Tax havens 47p.Corporate profit in the UK = 1p; Tax havens 47p.

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The Problem:The Problem:Bakan (2004) argues that aBakan (2004) argues that a““corporation can neither recognize nor act upon corporation can neither recognize nor act upon moral reasons to refrain from harming others. moral reasons to refrain from harming others. Nothing in its legal makeup limits what it can do Nothing in its legal makeup limits what it can do to others in pursuit of selfish ends, and it is to others in pursuit of selfish ends, and it is compelled to cause harm when the benefits of compelled to cause harm when the benefits of doing so outweigh the costs. Only pragmatic doing so outweigh the costs. Only pragmatic concern for its own interests and the laws of concern for its own interests and the laws of the land constrain the corporationthe land constrain the corporation’’s predatory s predatory instincts, and often that is not enough to stop it instincts, and often that is not enough to stop it from destroying lives, damaging communities, from destroying lives, damaging communities, and endangering the planet as a wholeand endangering the planet as a whole”” (p. 60).(p. 60).

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The role of the state?The role of the state?Neoliberal state sponsor of capitalismNeoliberal state sponsor of capitalismGlobalisation is a key factorGlobalisation is a key factorReliance of voluntary codes of governanceReliance of voluntary codes of governanceThe role of accounting technologies.The role of accounting technologies.Tax is portrayed as a Tax is portrayed as a ‘‘costcost’’ rather than return on rather than return on ‘‘social capitalsocial capital’’..Offshore world and its opaqueness.Offshore world and its opaqueness.Capital can make soothing commitments but has Capital can make soothing commitments but has no commitment to any product, place or country.no commitment to any product, place or country.

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Tax Avoidance/Evasion IndustryTax Avoidance/Evasion IndustryAccountants; Lawyers; Finance IndustryAccountants; Lawyers; Finance IndustryA partner from a mediumA partner from a medium--size firm: size firm: ““No matter No matter what legislation is in place, the accountants and what legislation is in place, the accountants and lawyers will find a way around it. Rules are rules, lawyers will find a way around it. Rules are rules, but rules are meant to be brokenbut rules are meant to be broken”” (The Guardian, (The Guardian, 18 March 2004).18 March 2004).

No consideration of social consequencesNo consideration of social consequencesTax Avoidance schemes not disclosed to the publicTax Avoidance schemes not disclosed to the publicLitigation can last for years. Questions about quality of Litigation can last for years. Questions about quality of earningsearningsPoor public accountabilityPoor public accountabilityLimits to what the law can achieve.Limits to what the law can achieve.

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EnronEnron Code of Ethics: Code of Ethics: ““officers and employees of officers and employees of the company are responsible for conducting the the company are responsible for conducting the business affairs of the Company in accordance with business affairs of the Company in accordance with all applicable laws and in a moral and honest all applicable laws and in a moral and honest manner. manner. …… Employees of Enron Corp, its Employees of Enron Corp, its subsidiaries and its affiliated companies subsidiaries and its affiliated companies [collectively the Company] are charged with [collectively the Company] are charged with conducting their business affairs in accordance with conducting their business affairs in accordance with the highest ethical standards. the highest ethical standards. …… moral and legal moral and legal obligations will be fulfilled openly, promptly and in obligations will be fulfilled openly, promptly and in a manner which will reflect pride on the Companya manner which will reflect pride on the Company’’s s namename”” ..

But rampant tax avoidanceBut rampant tax avoidance

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UBS: UBS: ““The ultimate purpose of all UBS The ultimate purpose of all UBS activities is to increase client satisfaction activities is to increase client satisfaction ……UBS upholds the law, respects regulations UBS upholds the law, respects regulations and behaves in a principled way. UBS is selfand behaves in a principled way. UBS is self--aware and has the courage to face the truth. aware and has the courage to face the truth. UBS maintains the highest ethical standardsUBS maintains the highest ethical standards””(p 57) (p 57) …… UBS takes its responsibility to UBS takes its responsibility to preserve the integrity of the financial system preserve the integrity of the financial system …… The firm has developed extensive policies The firm has developed extensive policies intended to prevent, detect and report intended to prevent, detect and report money laundering, corruption (p. 62). money laundering, corruption (p. 62).

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In in February 2009, UBS was fined $780 million by In in February 2009, UBS was fined $780 million by the US authorities for the US authorities for ““helping US taxpayers hide helping US taxpayers hide their bank accounts and taxable income from tax their bank accounts and taxable income from tax authoritiesauthorities””..…… helped United States taxpayers open new UBS helped United States taxpayers open new UBS accounts in the names of nominees and/or sham accounts in the names of nominees and/or sham entities entities …… bankers routinely traveled to the United States bankers routinely traveled to the United States to market Swiss bank secrecy to United States to market Swiss bank secrecy to United States clients interested in attempting to evade United clients interested in attempting to evade United States income taxes.States income taxes.

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KPMGKPMG: : ““quality and integrity of our people and our quality and integrity of our people and our work is paramount to everything we do at KPMG. work is paramount to everything we do at KPMG. Above all, we recognize that we operate in the public Above all, we recognize that we operate in the public interest and we must be open and transparent in our interest and we must be open and transparent in our operations and policies operations and policies …… We believe quality and We believe quality and integrity start with culture. Thatintegrity start with culture. That’’s why we place so s why we place so much emphasis on bringing our shared values alive much emphasis on bringing our shared values alive within member firms within member firms …… Independence, integrity, ethics, Independence, integrity, ethics, and objectivityand objectivity——these are all vital to the way we work these are all vital to the way we work …… It is the responsibility of each person working within It is the responsibility of each person working within a member firm to maintain their integrity and a member firm to maintain their integrity and objectivity objectivity …… Their actions are guided and monitored Their actions are guided and monitored through a set of consistent standards, processes and through a set of consistent standards, processes and procedures procedures …”…”

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KPMG fined $456 million for KPMG fined $456 million for ““criminal wrongdoingcriminal wrongdoing””…… senior tax professionals urged the firm to senior tax professionals urged the firm to knowingly, purposefully, and willfully violate the knowingly, purposefully, and willfully violate the federal tax shelter law.federal tax shelter law.““KPMG tax professionals calculated the penalties KPMG tax professionals calculated the penalties for noncompliance for noncompliance -- ““Based upon our analysis of Based upon our analysis of the applicable penalty sections, we conclude that the applicable penalty sections, we conclude that the penalties would be no greater than $14,000 the penalties would be no greater than $14,000 per $100,000 in KPMG fees. ... For example, our per $100,000 in KPMG fees. ... For example, our average average ……deal would result in KPMG fees of deal would result in KPMG fees of $360,000 with a maximum penalty exposure of $360,000 with a maximum penalty exposure of only $31,000.only $31,000.””KPMG part of an established network for facilitating KPMG part of an established network for facilitating tax avoidance and evasion.tax avoidance and evasion.

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Diageo Plc: Diageo Plc: ““businesses have realised that there are businesses have realised that there are other occupants of their world other occupants of their world –– their broader their broader stakeholders. stakeholders. ……This dependency on our stakeholders, This dependency on our stakeholders, communities and environment means we have a strong communities and environment means we have a strong interest in their future. We benefit from working with interest in their future. We benefit from working with our stakeholders, from the prosperity of our our stakeholders, from the prosperity of our communities and from the stability of the environment. communities and from the stability of the environment. Contributing to these ends is an investment in our own Contributing to these ends is an investment in our own continuing success and the sustainability of our continuing success and the sustainability of our business. business. …… responsibility isnresponsibility isn’’t merely a boltt merely a bolt--on on function, but an attitude which we bring to the way we function, but an attitude which we bring to the way we do businessdo business”” ..Diageo CSR report mentions taxation issues , but Diageo CSR report mentions taxation issues , but ……

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Diageo average annual profits of Diageo average annual profits of ££2 billion.2 billion.Diageo plc, UK registered company, paid Diageo plc, UK registered company, paid around around ££43 million a year, or around 2% of 43 million a year, or around 2% of its overall profits in UK corporation tax. its overall profits in UK corporation tax. The company had used a variety of transfer The company had used a variety of transfer pricing practices to transfer brands, including pricing practices to transfer brands, including Johnnie Walker, J&B and Gilbey's gin, and Johnnie Walker, J&B and Gilbey's gin, and profits to a subsidiary in the Netherlands profits to a subsidiary in the Netherlands where profits accrued virtually taxwhere profits accrued virtually tax--freefree

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WPPWPP: Its 100 page annual corporate : Its 100 page annual corporate responsibility report (WPP, 2008) responsibility report (WPP, 2008) acknowledges responsibility to employees, acknowledges responsibility to employees, stakeholders and communities. stakeholders and communities. The company publicises its philanthropy and The company publicises its philanthropy and its efforts to promote healthcare and its efforts to promote healthcare and eradicate poverty in Africa, eradicate poverty in Africa, Silence on its tax policies. Silence on its tax policies.

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WPPWPP: company threatened to move its headquarters : company threatened to move its headquarters from the UK to Ireland, a place with lower from the UK to Ireland, a place with lower corporation tax rate and also offers considerable tax corporation tax rate and also offers considerable tax exemptions.exemptions.Chief executive, with a remuneration of Chief executive, with a remuneration of ££21 million, 21 million, said, said, ““We are looking at it [moving the tax domicile]. We are looking at it [moving the tax domicile]. It is not about nonIt is not about non--doms or capital gains tax it's doms or capital gains tax it's about some arcane proposals regarding the tax about some arcane proposals regarding the tax deductions for foreigndeductions for foreign--controlled corporationscontrolled corporations””““WPP average UK tax charge over the last six years, WPP average UK tax charge over the last six years, taking into account claimed reliefs, has been less taking into account claimed reliefs, has been less than than ££5m, against global profits averaging 5m, against global profits averaging ££500m a 500m a yearyear””. . Company used transfer pricing and offshore entities Company used transfer pricing and offshore entities to reduce its tax liabilities. to reduce its tax liabilities.

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Deutsche BankDeutsche Bank: : ““We are dedicated to We are dedicated to transparency in corporate governance and transparency in corporate governance and communication. communication. …… For us, Corporate Social For us, Corporate Social Responsibility (CSR) means acting Responsibility (CSR) means acting responsibly towards shareholders and responsibly towards shareholders and customers as well as towards our employees customers as well as towards our employees and society as a whole. Such a holistic and society as a whole. Such a holistic approach is the only way to ensure that approach is the only way to ensure that Deutsche Bank as a company is successful in Deutsche Bank as a company is successful in the long runthe long run””

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Deutsche Bank Deutsche Bank –– key player in Enronkey player in Enron’’s tax s tax avoidance schemes.avoidance schemes.““Deutsche Bank Deutsche Bank …… provided billions of dollars in provided billions of dollars in lending critical to transactions which the banks lending critical to transactions which the banks knew were tax motivated, involved little or no knew were tax motivated, involved little or no credit risk, and facilitated potentially abusive or credit risk, and facilitated potentially abusive or illegal tax sheltersillegal tax shelters””. In an internal memo one official wrote that in . In an internal memo one official wrote that in ““this transaction, reputation risk is tax related this transaction, reputation risk is tax related and we have been asked by the Tax and we have been asked by the Tax Department not to create an audit trail in Department not to create an audit trail in respect of the Bankrespect of the Bank’’s tax affairs s tax affairs …”…”Possibly facing a US fine of $1 billion.Possibly facing a US fine of $1 billion.

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Ernst & YoungErnst & Young: : ““we stand for People who demonstrate we stand for People who demonstrate integrity, respect integrity, respect …… People who build People who build relationships, based on doing the right thing relationships, based on doing the right thing ……We comply with laws, regulations and We comply with laws, regulations and standards that apply to us in our professional standards that apply to us in our professional conduct conduct …… We address questions of ethics and We address questions of ethics and consult appropriately to help resolve them. We consult appropriately to help resolve them. We do not hide from or ignore issues do not hide from or ignore issues …… recognize recognize the need to be honest in our competitive the need to be honest in our competitive behaviour. We reject unethical or illegal behaviour. We reject unethical or illegal business practices in all circumstances business practices in all circumstances …… We We employ professional scepticismemploy professional scepticism””..

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In July 2003, Ernst & Young fined $15 million In July 2003, Ernst & Young fined $15 million for failure to properly register tax shelters in for failure to properly register tax shelters in 1999.1999.2003: US Senate Committee found that the firm 2003: US Senate Committee found that the firm ““sold generic tax products to multiple clients sold generic tax products to multiple clients despite evidence that some despite evidence that some …… were potentially were potentially abusive or illegal tax sheltersabusive or illegal tax shelters”” ..72 page charge sheet against 72 page charge sheet against ““four current and four current and former partners of Bigformer partners of Big--Four accounting firm Four accounting firm Ernst & Young ("E&Y") with tax fraud Ernst & Young ("E&Y") with tax fraud conspiracy and related crimes arising out of tax conspiracy and related crimes arising out of tax shelters promoted by E&Y. shelters promoted by E&Y.

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WalWal--mart: mart: ““we believe in a philosophy of we believe in a philosophy of operating globally and giving back locally. We operating globally and giving back locally. We know we can make the greatest impact on our know we can make the greatest impact on our communities by supporting causes that are communities by supporting causes that are important to our customers right in their own important to our customers right in their own neighborhoods. Weneighborhoods. We’’re proud to be a "store of re proud to be a "store of the community" for all of the communities we the community" for all of the communities we serve by helping to provide financial and serve by helping to provide financial and volunteer support to more than 100,000 volunteer support to more than 100,000 charitable and communitycharitable and community--focused focused organizations, and by using our locations to organizations, and by using our locations to provide opportunities for our customers and provide opportunities for our customers and associates to give back associates to give back

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WalWal--Mart Mart –– with advice from Ernst Young with advice from Ernst Young developed elaborate structures to avoid developed elaborate structures to avoid taxestaxesREITsREITs-- paid rent to itself.paid rent to itself.Judge said, Judge said, ““there is no evidence that the there is no evidence that the rent transaction, taken as a whole, has any rent transaction, taken as a whole, has any real economic substance, other than real economic substance, other than reducing Walreducing Wal--Mart's taxesMart's taxes””

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Barclays Bank Barclays Bank -- ““committed to ethical practices, committed to ethical practices, upholding human rights and supporting the upholding human rights and supporting the communities where Barclays has a presence. We communities where Barclays has a presence. We aim to manage Barclays indirect economic, aim to manage Barclays indirect economic, ethical, social and environmental impacts too. ethical, social and environmental impacts too. ““Barclays defines human rights as basic Barclays defines human rights as basic entitlements which form the foundation for entitlements which form the foundation for freedom, justice and peace. As a global business freedom, justice and peace. As a global business we have clear responsibilities to support we have clear responsibilities to support governments and civil society organisations in governments and civil society organisations in upholding human rights principles wherever we upholding human rights principles wherever we have a presence.have a presence.

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Barclays Bank: history of being involved in Barclays Bank: history of being involved in tax avoidance schemes. tax avoidance schemes. For example, the bank played in key role in For example, the bank played in key role in helping Enron to avoid taxes helping Enron to avoid taxes Using trusts to avoid VATUsing trusts to avoid VAT££1 billion alleged tax avoidance 1 billion alleged tax avoidance –– recently recently reported in The Guardian.reported in The Guardian.

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What we could do with tax revenues?What we could do with tax revenues?969 million people live on less that $1 a day 969 million people live on less that $1 a day 162 million people 162 million people -- ““the ultra poor"the ultra poor"——survive survive on less than 50 cents a day on less than 50 cents a day About oneAbout one--half of the world's people live on half of the world's people live on less than U.S. $2 a day less than U.S. $2 a day 20 percent of the world20 percent of the world’’s people lack safe s people lack safe water for drinking, personal hygiene and water for drinking, personal hygiene and domestic use domestic use Some 1.6 billion people, about one quarter of Some 1.6 billion people, about one quarter of the worldthe world’’s population, have no access to s population, have no access to electricity. 2 billion more have only limited electricity. 2 billion more have only limited access.access.

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Worldwide Worldwide 774 million adults are illiterate774 million adults are illiterate64% are women64% are women

Low levels of achievement often related to:Low levels of achievement often related to:sociosocio--economic background; rural economic background; rural residence; lack of books; insufficient residence; lack of books; insufficient instructional time; inadequate physical and instructional time; inadequate physical and material resourcesmaterial resources

Pupil/teacher ratio of 100 are not uncommon.Pupil/teacher ratio of 100 are not uncommon.34 out of 84 countries decreased the share of 34 out of 84 countries decreased the share of GNP to education since 1999 GNP to education since 1999 24 out of 105 countries allocate less than 3% 24 out of 105 countries allocate less than 3% of GNP to education.of GNP to education.

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AAbout 16,000 young children die every day from bout 16,000 young children die every day from malnutrition malnutrition -- a yearly toll of almost 6 million, a yearly toll of almost 6 million, about the same as the population of Denmark.about the same as the population of Denmark.640 million children lack adequate shelter640 million children lack adequate shelter140 million children have never been to school140 million children have never been to school2003: 500,000 children (under 15) died of Aids2003: 500,000 children (under 15) died of Aids2.1 million children under 15 were living with 2.1 million children under 15 were living with HIV/Aids, mostly infected during pregnancy, HIV/Aids, mostly infected during pregnancy, birth or through breastbirth or through breast--feedingfeedingAbout 30% of young children in lowAbout 30% of young children in low-- and and middlemiddle--income countries are underweight income countries are underweight ––mainly in South Asia and submainly in South Asia and sub--Saharan Africa. Saharan Africa.

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Nearly 50% of all young children in the developing Nearly 50% of all young children in the developing world do not receive enough iron in their diets, world do not receive enough iron in their diets, endangering their mental and physical health.endangering their mental and physical health.10 million children die before their fifth birthday.10 million children die before their fifth birthday.Infant deaths per 1,000 births Infant deaths per 1,000 births –– UK, 5.0; UK, 5.0; Germany, 4.1;Nigeria, 95.5;Germany, 4.1;Nigeria, 95.5;Average life expectancy:Average life expectancy:

Swaziland is 33 years; Swaziland is 33 years; Botswana, 34 years; Botswana, 34 years; Lesotho, 36 years Lesotho, 36 years

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2006: Some 2.6 billion people worldwide do not 2006: Some 2.6 billion people worldwide do not have access to proper toilet facilities.have access to proper toilet facilities.1.8 million people die every year from diarrheal 1.8 million people die every year from diarrheal diseases.diseases.90% of the fatalities are children under the age 90% of the fatalities are children under the age of five.of five.$10 billion a year could halve the proportion of $10 billion a year could halve the proportion of people without basic toilet facilities by 2015. people without basic toilet facilities by 2015. This investment would net an estimated $84 This investment would net an estimated $84 billion in savings from improved public health billion in savings from improved public health and better living conditionsand better living conditions

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Every $100 million could fund Every $100 million could fund 3.33.3––10 million insecticide10 million insecticide--treated bednets; or treated bednets; or treatment for over 600,000 people for one treatment for over 600,000 people for one year for HIV/AIDS; or year for HIV/AIDS; or 5050--100 million dosages of treatments for 100 million dosages of treatments for malaria; or malaria; or full immunizations for 4 million children; or full immunizations for 4 million children; or water connections for some 250,000 water connections for some 250,000 households; or households; or 240 kilometres of two240 kilometres of two--lane paved roadlane paved road

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NEARER HOME: UKNEARER HOME: UK12.7 million people live in poverty 12.7 million people live in poverty 2006: 2.8 million children live in poverty. 3.8 2006: 2.8 million children live in poverty. 3.8 million when housing costs are taken into accountmillion when housing costs are taken into accountAround 40,000 underweight babies (less than 2.5 Around 40,000 underweight babies (less than 2.5 kg) are born every year, almost the worst rate in kg) are born every year, almost the worst rate in the western worldthe western worldBottom of a league table or child wellBottom of a league table or child well--being across being across 21 industrialised countries.21 industrialised countries.Due to poor housing and living conditions, unlike Due to poor housing and living conditions, unlike any other EU country, Tuberculosis (abbreviated as any other EU country, Tuberculosis (abbreviated as TB) is on the increase in the UK. In 2006, there TB) is on the increase in the UK. In 2006, there were 8,171 cases compared to 5,798 in 1992were 8,171 cases compared to 5,798 in 1992

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UK state pension UK state pension ‘‘the lowest level in Europe; the lowest level in Europe; --equivalent to just 17% of average earnings, equivalent to just 17% of average earnings, and well below the average of 57%.and well below the average of 57%.About 30,000 pensioners die each winter from About 30,000 pensioners die each winter from cold.cold.Widening income and wealth inequalitiesWidening income and wealth inequalities

the state manages poverty through the state manages poverty through tax/pension credits, but tax base is shrinkingtax/pension credits, but tax base is shrinkingtax revenues are crucial but companies tax revenues are crucial but companies avoiding taxesavoiding taxes

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Tax AvoidanceTax AvoidanceA challenge to corporate legitimacy.A challenge to corporate legitimacy.Penalises the poorPenalises the poorDeprives developing countries of crucial Deprives developing countries of crucial developmental resources.developmental resources.Thwarts the objectives assigned to elected Thwarts the objectives assigned to elected governments. A threat to democracy.governments. A threat to democracy.A RaceA Race--toto--thethe--Bottom.Bottom.

41% of all UK tax legislation comprises anti41% of all UK tax legislation comprises anti--avoidance measures designed to tackle tax avoidance measures designed to tackle tax avoidance schemesavoidance schemes

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Research Opportunities:Research Opportunities:CSR and Tax CSR and Tax –– It has numbers!!It has numbers!!Scope for innovative theorisingScope for innovative theorisingEmpirical work, case studies, surveys, interviewsEmpirical work, case studies, surveys, interviewsNew forms of financial reportingNew forms of financial reportingThe role of the stateThe role of the stateUnderstand globalisation Understand globalisation Improve quality of life, alleviate poverty.Improve quality of life, alleviate poverty.Improve EducationImprove Education

Can CSR change the nature of corporations?Can CSR change the nature of corporations?There are structural limits to CSR.There are structural limits to CSR.

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IS CORPORATE TAXATION IS CORPORATE TAXATION PRACTICE A CSR ISSUE?PRACTICE A CSR ISSUE?

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