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Businesses Seeking More Tax Guidance, Report Says

A majority of businesses would welcome greater guidance from tax authorities on what is deemed acceptable tax planning, according to the latest research from the Grant Thornton International Business Report.

The advisory firm interviewed 3,194 chief executive officers, managing directors, chairmen and other senior executives from all industry sectors between January and February. The resultant report reveals that although overall 68% would appreciate more tax guidance, there was a marked divergence between regions. Eurozone and Latin American companies lead the way, with 75 percent and 85 percent calling for change, respectively. On the other hand, in the case of North American executives, just 54 percent answered in the affirmative, with 67 percent of Asia-Pacific respondents agreeing.

Concerns were raised about the aims of current tax regimes. Only 31 percent of all those asked regarded their local tax laws and policies as geared to stimulate economic growth. The worst results came from southern Europe, at a mere 11 percent, and Latin America, at 23 percent. Nearly half of all business leaders believe that tax regimes do not bring enough economic participants into the tax base, although that sentiment was less marked lower among BRIC respondents than their G7 counterparts.

The BRIC/G7 divide was also seen in the inclination to make businesses’ tax affairs more transparent over the next year. A quarter of G7 executives said that plans were on the table, a figure considerably lower than the 68 percent recorded among their BRIC peers. Grant Thornton surmises that this reflects the different stages of tax system development and the varied local pressures across the two groups of economies.

Commenting on the findings, Francesca Lagerberg, incoming Global leader of Tax at Grant Thornton, said: “Tax is a cost to businesses in its simplest form so it is perhaps unsurprising to see few associate it with economic growth. Moreover, many mature economies around the world are undergoing severe fiscal retrenchment and business leaders are seeing taxes rise even as growth remains flat.

“However, that businesses feel taxes are too regressive and that not enough people and entities are being taxed is perhaps more surprising. It suggests that business leaders would be supportive of changes to the global tax system that would level the playing field.”

http://www.tax-news.com/news/Businesses_Seeking_More_Tax_Guidance_Report_Says____60855.html

 

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