Ploumen: paying tax is essential to promoting development

Companies that operate internationally should do more to ensure that their tax policies meet the norms for corporate social responsibility (CSR), according to foreign trade and development cooperation minister Lilianne Ploumen. She was speaking on Monday after being presented with the annual report of the Dutch Association of Investors for Sustainable Development (VBDO) about the sustainability performance of Dutch companies listed on the stock exchange. ‘Dutch companies are international leaders when it comes to CSR,’ the Minister said. ‘This should be matched by a responsible tax policy. Paying tax is a way of sustainably investing in the development of the country where a company is active.’

According to the VBDO report, 15% of Dutch listed companies focus explicitly on taxation in their CSR policy. The report also found that the companies examined are not sufficiently transparent about the amount of tax they pay abroad.

Tax remittances by international companies are a significant way for countries to benefit from foreign investment, particularly developing countries. The income generated enables them to reduce poverty, improve education and care, and budget for investment in infrastructure. Ms Ploumen commented, ‘It is essential for developing countries that businesses pay tax for their services. Ultimately, the business community will also benefit from the extra investment that is funded in this way.’

The Netherlands is working in partnership with the OECD on clarifying and tightening up international rules in order to combat tax avoidance. In addition, it is currently consulting with a number of developing countries on expanding bilateral tax agreements to include anti-abuse clauses. The Netherlands is also providing technical assistance to a number of developing countries to help build professional expertise at their tax administration agencies.