Accountants are the most trustworthy in taxby
Accountants are the most trustworthy people to contribute to the efficiency of the tax system, according to a new worldwide report by the ACCA which investigates the public’s trust in tax.
Public trust is central to an effective tax system. Therefore, the accounting profession will be pleased to hear the results from a new study from the ACCA which saw high levels of trust in professional accountants.
Who are the most trustworthy stakeholders?
The majority of the people surveyed in the Public Trust in Tax report said tax accountants contribute to improving tax systems by making them more efficient (58%), more effective (56%), and fairer (53%). The profession was followed by professional tax lawyers (50%).
Accountants fared better than politicians who remained the least trusted group, with a 22.8% distrust rating from the public.
Opinions on government tax authorities were polarised - 43% saying they trust or highly trust the tax authorities (third most-trusted group) while 22% said they distrust or highly distrust them (fourth most mistrusted group).
Kevin Dancey, chief executive of IFAC said: ‘As leaders in the global accountancy profession, we are proud to see the high levels of trust in professional accountants. This embodies the profession that we know. At the same time, we understand that there is always more to do to sustain and strengthen that trust.
The survey also showed that people have a huge lack of trust in social media on the issue of tax, which came in as the least trusted source by more than 40% of those surveyed.
What should the tax system target?
The third annual Public Trust in Tax study comes after after tax played a pivotal role in assisting businesses through the turmoil of the Covid pandemic.
As governments and citizens across the world re-evaluate tax priorities in the wake of the economic shock of the virus, two thirds (66%) of survey respondents favoured using tax incentives to help individuals and small businesses to recover from the effects of Covid-19.
The respondents also wanted to see tax incentives target ‘global megatrends’ such as climate change and the ageing population.
Elsewhere, the survey also showed that support had fallen in 15 of the 20 countries for international collaboration on tax, despite the fact that this year has seen historic advances in international tax cooperation, including agreement by G7 countries to enforce a minimum rate of 15% corporation tax.
Just as surprisingly, most respondents were in agreement that they felt their country was paying a ‘reasonable amount of tax’.
However, less than one in four people felt that those on a higher income paid a reasonable amount of tax.
The same went for multinational corporations, with seven countries in agreement that these establishments weren’t paying enough tax. Local companies showed a different response, with 33% believing they were likely to be paying a reasonable amount of tax.
Despite this, the survey showed that 49% of people overall were in favour of using tax incentives to attract multinational business.
‘Public trust is central to tax morale
Public Trust in Tax study is conducted by the ACCA and canvasses opinions from 8,000 people across the G20 countries (which make up around two-thirds of the world’s population) plus New Zealand.
Report author Jason Piper, head of taxation for ACCA, said: ‘The relationship between taxpayers and governments, and between businesses, society and tax systems, will be fundamental to the shape of the economies that support us all, over the coming years.
‘Public trust is central to tax morale, which is the tendency for individuals and businesses to pay their tax voluntarily and without intervention by tax authorities.
‘Anecdotally, many respondents stressed the importance of financial education from an early age, so that people understand the purpose of tax. Our experts agreed that citizens need to comprehend where their tax money is going and what benefits it pays for.