A post COVID outlook
How we manage through this period will define how we come out of it
In a time when we are socially distancing, it is more important than ever that we bring together diverse perspectives and seek out opportunities to connect with one another, and that’s why I felt it was so important to bring together our global Responsible Tax community virtually in recent weeks. Together, we “met” for a series of virtual roundtables to look at the immediate, medium and long-term responses to COVID-19, as economies start to emerge from lockdowns and look to rebuild. We had a total of 60 participants across the roundtables, and you can review the full summaries of these discussions here. I also wanted to reflect further on these, and let you know where we plan to go next.
As governments around the world have introduced a number of emergency measures as a means to limit the economic damage caused by COVID-19, it’s crucial that businesses, governments and societies at large come together to plan not only the immediate response, but also to plan for the long-term impacts and the type of future we want to create coming out of what has been called the most significant global challenge since the Second World War. In my mind, the pressures of the current climate and the emphasis on rapid response and recovery begs the question, how will businesses manage their moral tax compass during these trying times?
KPMGs four-phased lens
Across the KPMG network, we have approached this situation through a four-phased lens in order to help keep a view on the future, even whilst it is largely unknown, and we are encouraging businesses and other organizations to do the same. Of course, everyone is experiencing this situation in different phases and at different times. The reaction phase is really about ensuring the wellbeing of our people and responding to immediate pressures. Then we have the resilience phase, which goes beyond the immediate reaction to proactively managing the situation with an eye to the future. From there, we have the recovery phase, where we see businesses starting to emerge from some of the challenges and perhaps identify new opportunities to help them succeed in the final phase, which we see as the new reality that lies ahead.
What I think is important about this approach is that it keeps us looking to the future we want to build, even as we are having to respond to the immediate realities we are facing now. Sometimes when we are in the midst of a crisis, it can be difficult to think ahead, or even to reflect on the moment. How do we use this period as an opportunity to make ourselves more resilient? How can we improve and come out of this even stronger? These are precisely the kinds of questions that businesses will need to ask themselves during this period and beyond, and these types of topics were the focus of our recent roundtable series. The conversations were candid and collaborative, with participants really embracing the opportunity to share and not shy away from contrasting views. I believe this courage to engage with all perspectives is crucial to our ability to get this right, and I am thankful for all of those who participated in these important discussions.
When we started the Responsible Tax project back in 2014, I characterized the tax debate as being “men on Mountaintops with Megaphones” shouting views from their supposed positions on the moral or intellectual high ground, with little or no constructive dialogue. Since then, things have really changed and we are having collective global discussions around Responsible Tax, which I believe will ultimately lead to the development of new ideas and better tax policy.
The importance of responsible behaviour
Responsible behaviour in relation to tax is not merely as important as it’s ever been, it’s even more important now. In relation to tax and all other matters, businesses are going to be judged after this by how they conducted themselves during COVID-19. Governments have a huge responsibility to try and make wise choices as they manage through difficult economic times and businesses have a responsibility to engage with policy makers in a transparent and non-self-interested way to help guide tax and other policy in ways which support the recovery and, hopefully, ensure that we come out of this as a fairer, greener world. And businesses will be under even more scrutiny to ensure they are playing their part in the rebuilding of economies following this period. Therefore, managing tax approaches effectively and making sure you are doing the right thing is incredibly important in today’s environment. In fact, I believe these two objectives are now one and the same.
We plan to build on this discussion series, with additional roundtables to engage even more business leaders in discussions of the issues and tensions emerging. You can find a more fulsome summary of the recent roundtable discussions here. We welcome participation from others with a view in future sessions, as well as your ideas for future topics. Please email firstname.lastname@example.org to learn more.
by Jane McCormick
Areas of expertise Operating Effectiveness Pensions and Retirement Funds Tax Tax planning Tax strategiesEducation and qualifications MA St Hugh's College, OxfordAccreditation HM Inspector of TaxesProfessional Associations Forum for Tax Professionals Tax Policy Committee of the ICAEW