ACCA urges govts not to take green taxation as a cure-all

FE Team | Published: November 30, 2012 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Association of Chartered Certified Accountants (ACCA) at a press meet Thursday emphasised environmental taxation, but said governments and policymakers should not see it as a solution to all problems.
The organisation, currently operating in 170 countries, is the largest global body of professional accountants. It published a policy paper on 'Green taxation in a recession' in this August, which stated that green taxation should not be seen as a cure-all for all ills, said international taxation expert and Head of Taxation at ACCA Chas Roy Chowdhury in the ACCA Bangladesh office.
The press conference was organised to express ACCA's views on global tax policy following the worldwide economic downturn. Mohua Rashid, country head of ACCA Bangladesh, and Monirul Hassan, business development manager of ACCA Bangladesh, were also present at the meet.
Mr Chowdhury said, "It is clear to ACCA, as a global body, that due to the ongoing global recession and economic uncertainty, the governments are looking to environmental taxation as a possible way to bolster their tax revenues."
"But ACCA has been lobbying hard to say that for this to happen successfully, the governments need buy-in from business and their electorates. Consultation is important."
He said ACCA is calling for global coordination to maximise the impact of environmental taxation, and reduce the likelihood of businesses shifting location to avoid tax payment.
According to the policy paper, government-borrowing around the world has soared since 2008, due to bank bailouts, currency stabilisation measures and continued weakness in tax revenues, resulting in sharp rises in public deficits and debt. The governments around the world are aware that they need to tackle these issues quickly.
As a result, many governments are looking at environmental taxation as a possible way to make up for the shortfall from declining tax intake due to the recession in the developed economies.
Before they do this, they will need to ensure that businesses and their electorates support this approach and are able to see what the environmental taxes are achieving. The governments and policymakers need to maintain the trust of businesses and public by striking a balance between the need to raise revenues and the environmental objective underpinning the policy.
Mr Chowdhury also said the pursuit of economic growth at the cost of everything else cannot continue, and ACCA recommends that the governments respond to the recession by implementing measures that will encourage environmental investment, and ultimately a more sustainable approach.
"Green taxation cannot solve the environmental crisis and raise significant tax income on long-term basis. This is because a system aimed at reducing what it is taxing, if successful, will eventually destroy its own tax base."
During Mr Chas' visit ACCA Bangladesh held a roundtable discussion at the British High Commission, where c-level decision-makers from leading multinationals, local conglomerates and policy-makers were present. Besides, a seminar was also held at a city hotel, where he highlighted global tax policy.