Licensing tax advice December 5, 2012 at 9:10 am
We are finally seeing the beginnings of a backlash against the kind of aggressive tax planning that is commonplace among multi-nationals and which has done so much to increase deficits and inequality. In this context, I have a modest proposal: license tax advice.
We could proceed as follows. First, giving tax advice to corporations or providing advice on tax structures would become a licensed activity, with personal criminal liability for breaking the law for both giver and taker. Second, a curriculum of training would be developed including ethics, tax law, accounting, and financial products. An exam based on this curriculum would be developed, and a condition for gaining a license would be passing the exam. There would then be continuing professional development requirements, and a five yearly re-licensing requirement which includes continuing ethics training.
Here’s the kicker. The exam would be really, really hard. Entry to the ‘profession’ of defrauding the government would therefore be controlled. We would also charge a sensible license fee, £50,000 say, and require a performance fund of at least £1 million. 80% of all compensation received by the licensee over a minimum would be posted to the performance fund. The ‘profession’ would have rules including standards of disclosure, intent, and so on, and the performance fund would be forfeit in the event of breaches of these rules as determined by the licensing body. Unethical tax structuring would also result in the loss of license and a lifetime ban.
The licensing body would have a governing council which included ordinary tax payers as well as professionals and politicians. It would be subject to parliamentary scrutiny. That would be a good start.