By Alistair Phillips-Davies, Chief executive, SSE Plc
THERE is little doubt that the tax companies pay is under increasing public scrutiny. The Institute of Business Ethics publishes a survey each year, measuring the business issues of concern to the British public. That survey tells us that tax avoidance by big businesses is, by far, the issue of greatest concern.
It seems to me that the most damaging notion to the relationship between big companies and the people they serve is an idea that “there is one-rule for those with the levers of wealth and power, and another rule for everyone else”. I believe this is an incredibly damaging concept and one that undermines the social contract within which we all exist.
The social contract between the citizens and their government is easy to understand – citizens vote, they pay their taxes and they benefit from the security and benefits that public services provide. Companies need to consider themselves in the same context.
Our obligation is to create successful businesses that share the wealth created; by providing good jobs that pay fair wages, paying our taxes, providing an appropriate return to shareholders – and in SSE’s case – investing in the low-carbon energy infrastructure the country desperately needs.
SSE depends on good public services: to educate our employees, keep them healthy and transport goods and services to customers.
So there has to be a quid pro quo.
Rather than corporation tax being thought of as a penalty on profit, it should be seen as a sharing of success. And I am proud that SSE is one of the UK’s largest tax payers. In 2016, we were the 14th largest tax payer in terms of taxes paid which includes: environmental taxes, business rates and corporation tax.
Of course SSE would never seek to over-pay tax: but we do rule out the sorts of practices that mean we could avoid tax.
We will not use tax havens and we will not use artificial profit-shifting mechanisms. We seek to have a constructive relationship with the tax authorities in each of the countries we operate in.
We understand a responsible approach to tax by big business is important to the wider economy and – in particular – the principles of responsible taxation are of vital importance to the developing world. SSE operates in two countries – the UK and Ireland – and we publish a country by country report. Presented in a table form our customers and stakeholders can see the scale of our operations in each market: the number of people employed; the revenue earned; and, the assets owned. If SSE grows into new markets, we will be committed to reporting the scale of our operations there, too.
At SSE we understand that what we say about our tax affairs was not necessarily enough to reassure our customers. That was why we looked to the Fair Tax Mark – the world’s first independent accreditation for fair tax – to provide a third party certification that we meet their standards. SSE has just been awarded the Fair Tax Mark for the fourth year in a row – cementing our long-term commitment to play fair by tax.
I would like to think, in years to come, the standards we have voluntarily signed up to will become a norm with the connection between business and society having been strengthened as a result.
The reason for this is simple. In the long run it is in all our interests that we live in a successful economy with strong public services that are supported by responsible private businesses.
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