Today sees the launch of a new accreditation scheme for businesses – the Fair Tax Mark. It aims to reward those who are transparent about their tax affairs and act responsibly. It’s been developed by members of Ethical Consumer and the Tax Justice Network, Richard Murphy et al. It has been deliberately kept simple so that smaller businesses can participate, and it is initially aimed at UK based companies rather than international corporations, which is more complicated.
It’s not the first time such a thing has been attempted. A previous effort ranked a range of retail companies according to three tax transparency criteria. It didn’t catch on, with critics asking who had decided what a ‘fair’ amount of tax was. Wisely, it has been rethought fairly fundamentally. It is no longer a badge given out by tax campaigners, but a certification that companies can gain.
In that sense it’s closer to FSC wood or Fairtrade certification. Companies that wish to be recognised as transparent in their tax affairs can apply and then use the mark in their communications. It works with business and rewards them, rather than sitting in judgement over them. Businesses that take pride in paying their contribution will have a clear and simple way of saying so to customers, and consumers who care about supporting ethical businesses will have another tool at their disposal.
Given that tax and transparency is a big issue at the moment, it may well be adopted. Unity Trust Bank, Mid-Counties Co-op and the Phone Co-op are the first three companies to pioneer the mark, and those who trade on their ethical contributions will no doubt be interested.
Of course, the usual downsides of accreditation marks apply here too. They take a certain critical mass before anyone starts noticing them. They take time to get established – Fairtrade and FSC took a decade to really make an impact. There are a dozen other badges about, from the Red Tractor to Fairwear to Soil Association certification and many consumers don’t really know what these mean. Since the Fair Tax logo doesn’t exactly say ‘accounting transparency’ (and neither does the name, come to think of it), it may just join that long list of only vaguely understood certifications.
As my brother and I highlighted with our satirical ‘unfairtrade logo‘ a few years ago, it also makes a virtue out of what should be standard practice, while those that choose not to be transparent suffer no penalty. Wouldn’t it be great if companies were all ranked on their ethics and had to display the results on their doors, the way food outlets display their hygiene ratings?
It’s a philosophical point rather than an objection, but it shows how these sorts of certifications are not enough in themselves, and need to be accompanied by measures to raise accountancy standards and close tax loopholes. Fortunately, there’s been a fair amount of progress on that front recently, and it’s certainly on the political agenda.
All of which makes it an opportune moment to launch a public-facing campaign that draws attention to business transparency. We will have to wait and see whether the Fair Tax Mark catches the public imagination, but I’ll certainly be looking out for it.