Increased public scrutiny about the amount of tax paid by companies has given rise to a growing need for all businesses to better understand their tax obligations for management and corporate reporting purposes and to benchmark these tax costs against competitors and industry sector. However, getting a proper picture of a company’s true tax costs can be difficult, since often the only information on taxes paid is that of corporate tax listed on its financial statements.
What is Total Tax Contribution (TTC)?
In response to this need, PricewaterhouseCoopers has developed a framework for reporting Total Tax Contribution (TTC) that is a better measure of a company’s economic contribution in taxes. TTC evaluates all business taxes paid by a company — making a distinction between those paid and borne by the company, and those collected on behalf of the government. It also takes into consideration tax compliance costs, which are incurred in assessing and remitting taxes borne and taxes collected.
TTC is an important component of transparency and better reporting that is being rolled out globally by PwC and has already been used successfully by the World Bank, London’s The Hundred Group, the Business Council of Australia and Australia’s Corporate Tax Association.
The benefits of Total Tax Contribution (TTC)
Gaining an understanding of your company’s Total Tax Contribution will help you monitor and manage taxes to make better informed business decisions and communicate their economic impact in taxes.
Quantification — examines all business taxes borne and those collected on behalf of the government, then quantifying the total corporate contribution in taxes.
Management — provides benchmarking against competitors and within industry groupings. Facilitates dialogue with the board, and brings focus to the management of tax cost and the allocation of tax resources.
Transparency — provides robust data for: transparent external reporting of taxes paid and collected; linking the company’s economic contribution in taxes paid to corporate social responsibility reporting; and facilitating discussion with government and other interest groups.
Contact us to learn more about TTC.