Archives For David Cameron

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By Jason Piper, tax and business law manager, ACCA

History tells us that if communities are going to grow beyond a particular size then they will have to rely upon a level of infrastructure spending which can only be provided by the state. Philanthropy and altruism, on the part of private resource owners, get us only so far when it comes to providing sufficient quality and quantity of the pure public goods needed to support the sort of society that has developed over the last few thousand years.

There’s a lot of debate internationally at the moment on whether you can ‘tax yourself into prosperity’ with opinion clearly divided on whether it is possible. At one level, the concept seems to be nonsense. Taxation diverts privately controlled resources into state hands. Simply moving funds from one pot to another like this can’t possibly increase the overall level of funds available, can it?

It is what the various controllers of this revenue might do with those resources if placed in their hands that makes all the difference. After all, a bucket full of water can be left to stagnate by someone with no interest in gardening, or taken by a green-fingered neighbour and used to water their crops. By the same token, if a government can clearly identify resource owners who aren’t generating prosperity with their funds and take it from them to be put to some other use which might enhance prosperity, then it is possible that the tax system could be a mechanism towards that end. (nb that’s a really big “if” on identifying who can best use resources, and it’s keeping a lot of economists busy trying to work out how, or even whether, we could do it).

Taxation is an idiosyncratic and asymmetric process. At its core, it is about taxpayers more or less (mostly less) voluntarily surrendering resources which they could have used directly for their own benefit, to be used instead ‘for the benefit of society.’ That means clear parameters have to be created to help guide policymakers when they’re exercising this unique power, and perhaps even more importantly, to evaluate their success after the event.

Whether we agree with what a particular policy is trying to achieve is an individual value judgement. Regardless of this individual view, we can form an objective picture of whether the policy has been executed effectively, and measure the impact of the changes on the tax system.

When evaluation is done, changes should be assessed on the three core tenets of the tax system – simplicity, certainty and stability. While there is likely to be some compromise on at least one of those factors in any new measures, policymakers need to understand why they are proposing the changes, and what they could do differently to ameliorate any negative impacts without diluting the ultimate policy impact.

(l-r): Sarah Hathaway, head of ACCA UK; Sir David Wallace, master at Churchill College, Cambridge; Timothy Luke, Prime Minister's senior adviser for business; David Cameron, UK Prime Minister; Professor Sir Martin Sweeting, executive chairman of Surrey Satellite Technology; Martin Donaldson, chief executive of the British Council

(l-r): Sarah Hathaway, head of ACCA UK; Sir David Wallace, master at Churchill College, Cambridge; Timothy Luke, Prime Minister’s senior adviser for business; David Cameron, UK Prime Minister; Professor Sir Martin Sweeting, executive chairman of Surrey Satellite Technology; Martin Donaldson, chief executive of the British Council

by Sarah Hathaway, head of ACCA UK  

There was a great deal of fanfare about David Cameron being the first British Prime Minister to visit Kazakhstan at the end of June and judging by the £700m worth of deals with British businesses that came from that visit alone, it was worth all the fuss.

BG Group, Rolls Royce, other business representatives and those from UK universities all flew out to the Central Asian market to meet with business leaders, policy makers and other stakeholders to discuss ways the UK and Kazakhstan can work together.

It is no surprise that where UK businesses look to develop links in emerging economies, finance professionals are there in readiness to support not only cross-border deals, but also the businesses within emerging markets, which is why ACCA UK was invited by UK Trade & Investment to join the PM and Trade & Investment Minister Lord Green on the visit to Kazakhstan.

ACCA was the only accountancy body on the visit, and I was honoured to be the organisation’s representative on the visit. We not only have an established presence in the Central Asian country, as well as 1,604 ACCA students there, we are also a genuinely global body. Of course I would say that and our PR team would be proud of me for plugging those key points, but these are genuinely valuable assets that are key to emerging markets such as Kazakhstan.

Kazakhstan is a young country, just 20 years old, but is rapidly developing and has strong industries – oil, mining, pharmaceuticals and financial services to name a few. The republic’s President, Nursultan Nazarbayev, has high ambitions for the economy, keen to give it a truly international presence. That’s where finance professionals have a key role to play.

It’s one thing to have strong mining and oil sectors, but taking them global requires finance talent to help that happen. The international focus of UK finance expertise is essential for Kazakhstan to not only cement ties with UK businesses but to reach out on a more global scale.

Having that complete finance knowledge in the board room will increase the levels of corporate governance and sends a clear signal to investors that Kazakhstan is not only open for business but that it has the finance experience supporting its industries. With growing adoption of IFRS there is arguably a greater need for rapidly developing markets to look to us for skills. It is no coincidence that the Managing Director of Samruk Kazyna, Kazakhstan’s sovereign wealth fund is Peter Howes, a UK finance professional.

From a UK point of view, British businesses are already benefiting from closer trade links with Kazakhstan, but there is scope to go further. There is a need there for experienced finance professionals to boost Kazakh and UK companies doing business with each other.

However, we shouldn’t look at this solely from a short-term view point. Yes, ACCA UK and its members can play a key role in helping Kazakh and UK companies doing business with the republic hone the finance function and handle the constantly changing regulations in the country – ACCA members’ management skills are critical to that end. Longer term, however, ACCA has a bigger role to play.

The ethos behind ACCA’s accountancy qualifications is that home grown talent can emerge and lead a market’s own finance profession. It will take time for Kazakhstan’s finance expertise to transform into chief finance officers with the complete, global management skills required to take businesses in the region onto a surer international footing, but over time they will emerge, which is why ACCA is there already.

Our global experience, internationally recognised accountancy qualification and established presence in Kazakhstan means we are well-placed to support the country as it develops the next generation of finance talent from within.

The fact we are there, along with Ernst & Young and other global accountants, also means that tomorrow’s CFO’s can learn and benefit from working with the current crop of the world’s finance leaders and nurture links with their UK counterparts. As well as being a trading partner for UK plc Kazakhstan can be a finance profession partner into the future as well.

There is another benefit to us being there. ACCA UK represents accountants in the UK, irrespective of size. Many of our members’ clients are small and medium sized enterprises who could hugely benefit from exports to emerging economies. What’s to stop a small business specialising in valves in Yorkshire exporting to Kazakhstan’s expanding oil industry? It can be daunting, but our members are there to help those business meander their way through the red tape of exporting, and with ACCA UK securing closer ties in Kazakhstan and the wider Central Asian region the scene is set for that to happen.

Kazakhstan has a lot going for it, as does the potential relationship it has with UK plc. Finance professionals are there to make it happen.