Studying this article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs. One hour of learning equates to one unit of CPD.
Multiple-choice questions

Charalambos Antoniou FCCA is a tax director at PwC Switzerland

In early spring 2020 I wrote an article arguing that it was time for companies to urgently consider adopting a policy of public tax transparency. That was before we were aware of the full implications of Covid-19 – and before the World Economic Forum (WEF) published its Measuring Stakeholder Capitalism paper, which includes specific metrics for reporting on tax.

Since then the urgency has increased, not least because governments around the world are in urgent need of revenues to counter high levels of borrowing.

First, to avoid confusion, let’s be clear that public tax transparency isn’t about the data that businesses are required to disclose in accordance with accounting standards. It is about the additional information they choose to report in relation to their tax governance framework (designed to make sure their tax affairs are governed rigorously), their total taxes paid and collected, their tax-paying behaviour, and the narrative they use to put this information into its proper context.

In other words, public tax transparency is about proactively responding to pressure from stakeholders (including, among others, shareholders) to say more about the contribution the business makes to the public finances.

Value added

Why is this now more important? In recent decades businesses have become increasingly aware of the benefits of reporting on sustainability. However, their efforts have tended to focus on the environmental component.

But then came the publication of a number of milestone documents placing tax firmly on the sustainability reporting agenda, most notably the Principles for Responsible Investment’s engagement guidance on corporate tax responsibility, the B Team’s responsible tax principles, the European Business Tax Forum and the new GRI 207 tax sustainability reporting standard.

These documents are a clear indication that tax in general, and public tax transparency in particular, can add substantial value to the sustainability debate. As such they are an added incentive for companies to consider harnessing some of the benefits of more comprehensive tax disclosure in terms of increased trust and greater attractiveness as a potential employer or investment.

Given the unprecedented amounts that governments are spending on Covid rescue packages, there is more pressure than ever for companies to consider public tax transparency strategically and take appropriate action

The documents have shaped perceptions of the importance of public tax transparency, and to an extent have increased the pressure on businesses to adopt. There are a growing number of companies interested in taking up the tax transparency challenge.

At the same time, sustainability reporting standard-setters (and others) have attempted to provide organisations with tools for reporting on their responsible taxpaying behaviour. The trouble is that so far the requirements and guidance have not been consistent, making it difficult for companies to judge precisely what to report and how, in order to paint a representative and comparable picture without putting themselves at an unnecessary disadvantage to their peers.


While there’s still a long way to go, the publication in September 2020 of the WEF’s paper on measuring stakeholder capitalism reflects an effort to resolve this confusion. The authors explicitly set out to create a synthesis of the best guidance available, without reinventing the wheel.

The centrepiece of the document is a set of stakeholder capitalism metrics and disclosures designed to enable WEF members to align their mainstream reporting on performance against environmental, social and governance (ESG) indicators and to track their contributions towards the United Nations’ Sustainable Development Goals (SDGs) on a consistent basis. The paper also proposes expanded metrics for those wishing to go further.

From the perspective of public tax transparency, the key core metric in the paper is ‘total tax paid’: the total amount of global tax borne by the disclosing company, including corporate income taxes, property taxes, non-creditable VAT and other sales taxes, employer-paid payroll taxes, and other taxes that constitute costs to the company.

The relevant expanded metrics are ‘additional tax remitted’ (total additional global tax collected by the company on behalf of other taxpayers) and ‘total tax paid by country for significant locations’.

The WEF paper presents the tax metric under the theme of community and social vitality, clearly viewing tax as part of the social dimension of sustainability. The WEF guidance should be influential in the development of sustainable tax reporting practice.


Another thing generally lacking so far has been benchmarking showing companies where they stand by comparison with their peers in terms of public tax transparency. To address this gap, PwC initiated a benchmark study of 50 of the most noteworthy Swiss-based companies across 10 different industries. The study rates the standard that companies have reached – minimal, medium or advanced – in terms of disclosing their tax affairs.

Since the first study in 2018 there has been a steady decline in the number of companies with minimal disclosure (76% in 2018, 66% in 2019 and 62% in the as yet unpublished 2020 study), with corresponding increases in the number of medium-rated companies (24%, 32% and 36% respectively). However, despite a slight increase (from 0% to 2%) between 2018 and 2019 in those reaching the advanced level, the 2020 figures indicate stagnation at the top, with still only 2% making the most complete disclosure as measured by PwC.

So the basic message is that it is time for companies to consider their approach to public tax transparency – especially in the wake of the pandemic. There will be some companies, particularly those operating only in their domestic market, where the case is less pressing, but having a view and achieving internal consensus will be important for many.

Given the unprecedented amounts that governments are spending on rescue packages, there is more pressure than ever for companies to consider public tax transparency strategically and take appropriate action. Stakeholders want to be satisfied that emergency support, including tax measures, has been claimed legitimately and that companies are contributing proportionally to the recovery of the massive fiscal deficits triggered by Covid-19 rescue measures.

Public tax transparency is no longer limited to the pioneers. Now that it has gone mainstream, it is time for all companies to consider their response.