[ Director: Mário Frota [ Coordenador Editorial: José Carlos Fernandes Pereira [ Fundado em 30-11-1999 [ Edição III [ Ano X

segunda-feira, 12 de junho de 2017

Cake and taxes

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.com PLC.

Secretive tax regime are like cake: if you don't know what the ingredients are, how do you know whether it is good for you?
[Transparency International]

Elena Gaita is a policy officer for corporate transparency at Transparency International.

Brussels is quickly joining the ranks of cities where hipster cafes and eateries with quirky cakes and overpriced coffees are everywhere, offering treats for all kinds of diets. Upon a recent visit to one such cafe, I encountered some confusion on behalf of the staff. They had mixed-up the gluten free, vegan carrot cake, with the “regular” carrot cake, much to the dismay of my gluten intolerant friend.

When I gallantly offered to test the two cakes, I was surprised to find that despite subtle differences in flavour and texture, I couldn’t tell which cake contained which ingredients. My coeliac companion was upset that she didn’t know which cake was full of ingredients which were bad for her or ones which were fine.

When you can’t tell what’s on the inside of something, it removes the ability for people to scrutinise whether it’s good or bad. Much unlike cake, tax is something I’m sure most individuals would rather not have double helpings of. But, the ability to see what corporations pay in tax is vital to hold both them and the governments that host them to account. Yet, the problem of the global financial system, as shown by scandal after scandal, is its pervasive secrecy. We cannot see which corporations are paying what amounts of tax and where.

This kind of secrecy allows multinationals’ profits to be channelled offshore away from the countries where they were generated. Which means that we can’t tell if corporations have received secret sweetheart deals to lower their global tax bills or if they have been colluding with corrupt governments for preferential treatment. On the outside we may just see the cake, but on the inside we have no idea what it contains.
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