Tax forum 'fails to close trust gap'

News Article - 17 October 2006
Category: Business

A forum of tax authorities from across the globe has failed to consider the fundamental problem of a lack of trust between taxpayers and the government, an audit firm has stated.

Auditor KPMG said that attendees of the forum, which took place in Korea in connection with the Organisation for Economic Co-operation and Development Centre for Tax Policy Administration, offered no solutions to how the trust gap could be closed.

Members of tax authorites from 35 countries met to draw up measures or their Declaration, which included an international review of what part intermediaries play in tax planning and better cross-border exchange on information about tax-planning initiatives, with the aim of improving the implementation of taxation.

"It is only by engaging in discussions with taxpayers and tax intermediaries that authorities worldwide will rebuild the trust necessary for the efficient and effective administration of the tax system - which in turn should be aligned to a wider economic purpose than simple tax collection," said Loughlin Hickey, KPMG's global managing partner for tax.

According to the auditor, the forum did not consider the costs incurred through constant conflict with taxpayers."A failure to close the trust gap simply puts more pressure on tax administrations," Mr Hickey added.

The Chancellor Gordon Brown is to meet with city bosses in London this week to discuss how the capital can retain its financial status and talk about corporation taxation, the Times reports.

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