Christian Aid Urges Household Name Firms to Back Accounting Reform

August 31st, 2010

Christian Aid is launching a new phase of its Trace the Tax campaign for greater financial transparency by multinational companies.

The charity is asking supporters to help persuade four firms to back its call for accounting reforms which will help poor countries collect more of the tax billions which are rightfully theirs.

All four have assets and subsidiaries in developing countries. They are: Vodafone, Unilever, TUI Travel (which owns Thomson and First Choice) and Intercontinental Hotels Group (which owns Holiday Inn).

Helen Collinson, Campaigns Manager at Christian Aid said: ‘We are appealing to these companies to support our campaign for greater tax transparency, including the call for a new accounting standard to ensure companies report on their profits made and taxes paid in every country where they operate. It is really important to stress that we are not accusing these companies of tax dodging.

‘We want them to become leaders in their sectors and to encourage other multinational companies to support the campaign. By doing this, they will help shape global tax reporting and play their part in fighting global poverty.’

Ms Collinson added: ‘We believe that greater tax transparency will be good for business and we are hopeful that these companies will agree with us. Taxes pay for roads and infrastructure essential to commerce. They create a healthy and educated workforce. Taxes also help to make governments more accountable and countries more stable – all of which would benefit companies doing business in developing countries.’

Christian Aid is encouraging supporters to send messages to the four FTSE companies on postcards and by video, asking them to back the campaign.

International organisations such as the Organisation for Economic Co-operation and Development (OECD) recognise that tax dodging is likely to cost developing countries more than the total that they receive in aid in each year. Christian Aid estimates that their annual loss may be as great as $160 billion.

Earlier this year, the charity contacted the CEOs of the FTSE 100 and asked them to complete a survey of their views about tax, development and country-by-country reporting – an accounting standard, which would require companies to be more open about their activities around the world.

The International Accounting Standards Board (IASB) is the body with the power to introduce country-by-country reporting. It is funded by the Big Four accountancy firms – PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young – which have significant influence.

Christian Aid has chosen the FTSE Four because each one is audited by one of the Big Four accountants. As well as asking the four companies to publicly support country-by-country reporting, Christian Aid is calling on them to ask their auditor to support it too.

Written by Christian Aid

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