New guidelines for tax transparency are published today, for use by international governments, and drawing on the expertise of two Sheffield academics.
Now, amid debates in the race for a new Tory leader that have focused heavily on tax policy, there are calls for clarity on the UK’s intention – and independent audits for the gain of the society.
Professor Richard Murphy is from the Department of Accounting and Financial Management at the University of Sheffield.
Along with Professor Andrew Baker, from the Department of Politics and International Relations, he was approached by the Global Initiative for Fiscal Transparency (GIFT) to help draft the principles.
Democracy depends on understanding and yet confusion reigns, Professor Murphy argued, with promises from the two Tory hopefuls Rishi Sunak and Liz Truss that the public does not fully understand.
“So many things have been said which is very confusing,” he said. “We are being thrown numbers.
“What we don’t have is a comprehensive understanding of what these two people – or Labor or Lib Dems – really want the UK tax system to achieve for us.
“We need a new era of fiscal transparency, which starts with government defining what it is trying to achieve.
“Taxation is the one thing we all have in common,” he added. “This is truly the biggest and most important debate we can have.”
The new guidelines, issued by the General Assembly of the Global Initiative for Budget Transparency (GIFT), are backed by the International Monetary Fund, the World Bank and the Organization for Economic Co-operation and Development (OECD).
The principles set out mechanisms for debating and reflecting on tax systems, Professor Baker explained, enabling societies to use them as a powerful tool to tackle pressing challenges such as climate change, inequality and maintaining services. public.
Setting out frameworks and measures for national governments, he concluded that the UK should require tax policy documentation published annually and independently audited accounts.
Such transparency is essential for societies to hold decision makers to account, he argues, to reach informed judgments about whether systems are operating in the public interest.
While most people view taxes as a way to raise money, Prof Murphy said, they hold the power to shape society – by encouraging economic activity, home ownership or discouraging tobacco and alcohol consumption. It can also be used critically to redistribute wealth.
He said: “We need to have adult discussions about what we’re trying to achieve.
“Taxation is one of the most powerful tools we have to determine how society is shaped by government. Who do we want to tax – why – for what reason – and expecting what outcome?
“It will improve understanding of the tax system – more people might be willing to pay taxes as a result. Democracy depends on such an understanding.
“It’s a tool we can use to make the world a better place. More people pay taxes, more people engage in politics. So we have stronger and better political systems.”
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