LONDON: A former British secretary for international development has claimed that changing attitudes on corporate taxation has caused a “radical redefinition” of CSR.
Andrew Mitchell, member of Parliament for Sutton Coldfield and secretary of state for international development from 2010 to 2012, has argued that intense scrutiny of businesses' international tax affairs has moved the meaning of CSR away from its “fluffy” roots.
Interviewed in the summer 2013 edition of TLQ, the quarterly digital magazine created by corporate reputation agency TLG, Mitchell said that “tax havens are simply seen as unacceptable.”
“The argument that people should pay taxes in the places where that income is earned has now gained huge acceptance and strength,” he added.
This has resulted in a significant redefinition of CSR, which used to be seen as charity and a form of good paternalism.
“This business about making firms feel good, sucking up to the consumer by saying, ‘This is the social responsibility we are exercising,' was fine, but it was becoming, for many companies, cosmetic,” he explained. “This is about fair and proper proportionate taxation, where you pay the tax where it is earned.”
His comments follow controversies over the level of corporate taxes paid in the UK by multinational firms including Starbucks, Vodafone, Google, and Amazon.
This week, Starbucks made its first tax payment in the UK in five years, agreeing to pay more than £5 million.
In December, the firm hired RLM Finsbury to help navigate its tax issues, resulting in a pledge that it would increase corporate tax contributions in the UK.
Mitchell was in charge of international development until September 2012, before becoming chief whip. However, he resigned the whip position a month later over a disputed altercation with a policeman at the gates to Downing Street.
This story originally appeared on the website of PRWeek UK, the sister publication of PRWeek at Haymarket Media.